Villa King Aftermath? January Villa and Detached House Transactions Hit Record Low

January Nationwide Housing Transactions 50,228
Lowest Monthly Volume on Record
January Villa and Detached House Transactions Nationwide
Lowest Since 2006

The nationwide housing transaction volume in January this year was recorded as the lowest ever.

On the 2nd, real estate information provider Economy Man Lab reviewed the monthly housing transaction volume from the Korea Real Estate Board and found that the nationwide housing transaction volume in January 2023 was 50,228 cases. This is the lowest monthly figure since the related statistics began in 2006. Compared to the highest transaction volume in July 2020 (223,118 cases), it decreased by a staggering 77.5%.

This is attributed to the increased financial burden due to interest rate hikes and the weakened buying demand influenced by the forecasted decline in housing prices. Hwang Hansol, a research fellow at Economy Man Lab, said, "Although the Bank of Korea kept the base interest rate unchanged in February, the housing market froze due to still high interest rates and the downward trend in housing prices, resulting in the lowest transaction volume ever recorded."

Among housing types, villa (multi-family and row houses) and detached houses (single-family and multi-family houses) also showed record low transaction volumes. In January this year, nationwide villa transactions were 6,037 cases, and detached house transactions were 5,067 cases, the lowest since January 2006. Apartment transactions were recorded at 39,124 cases in January this year.

By region, housing transactions in January this year were 6,536 cases in Seoul; △Gyeonggi 12,022 cases, △Incheon 3,675 cases, △Busan 3,515 cases, △Daegu 1,458 cases, △Gwangju 1,462 cases, △Daejeon 2,653 cases, △Ulsan 825 cases, △Sejong 297 cases, △Gangwon 1,930 cases, △Chungbuk 2,180 cases, △Chungnam 3,452 cases, △Jeonbuk 1,724 cases, △Jeonnam 1,699 cases, △Gyeongbuk 2,906 cases, △Gyeongnam 3,211 cases, and △Jeju 683 cases.

Meanwhile, from the 2nd, multi-homeowners will be able to obtain mortgage loans when purchasing houses in real estate regulation areas such as Gangnam in Seoul, drawing attention to how this will affect housing transaction volumes. Until last month, people owning one or more houses could not get mortgage loans when buying additional houses in real estate regulation areas such as Gangnam, Seocho, Songpa, and Yongsan in Seoul.

However, this regulation will be lifted starting this month. Accordingly, when buying houses in regulation areas such as Gangnam in Seoul, mortgage loans up to 30% of the house price can be obtained, and in non-regulation areas such as Mapo, Nowon, and Gwacheon, loans up to 60% are available.

Loan regulations for rental and sales business operators will also be eased to the same extent. Additionally, the mortgage loan limit for apartments exceeding 1.5 billion KRW in speculative and speculative overheating areas, which was capped at 200 million KRW, will be relaxed. The mortgage loan limit for living stabilization funds, which was up to 200 million KRW annually, will also be abolished. However, the total debt service ratio regulation remains in place, and due to concerns over further housing price declines, it is expected that transaction volumes will not increase significantly.

This content was produced with the assistance of AI translation services.