Severe Cold Wave Hits Seoul Apartment Market... Will November Transactions Fall Below 2,000?

A cold wave has hit the Seoul apartment market. Due to prolonged high interest rates and tightened loan regulations, housing prices have fallen, putting November's sales volume at risk of dropping to the 1,000-unit range for the first time since January this year.

According to the Seoul Real Estate Information Plaza on the 21st, the apartment sales volume in Seoul last month recorded 1,745 transactions as of the previous day. The real estate sales reporting deadline is 30 days from the contract date, and the October transaction volume was tallied at 2,144 units as of November 17. This means last month's sales transactions were about 400 units fewer than in October. Since there are still 10 days left in the reporting period, it is difficult to finalize the figures. However, there is a possibility that the volume will remain in the 1,000-unit range for the first time in 10 months since January.

Seoul apartment transaction volumes fell below 1,000 units per month due to the prolonged impact of U.S.-originated high interest rates that started last year. After the government implemented the 1·3 measures to significantly ease real estate regulations, the numbers gradually recovered. However, after peaking at 3,866 units in August, the volume decreased for three consecutive months with 3,373 units in September and 2,311 units in October.

The weakened buyer sentiment is also evident in the transaction volumes of major apartment complexes in Seoul. The Helio City in Garak-dong, Songpa-gu, which has a total of 9,510 households, recorded only 7 transactions last month (excluding contract cancellations). This is a sharp drop to one-seventh compared to 50 transactions in February. During the same period, the number of units put up for sale by owners increased from around 600 to about 800, leading to an accumulation of listings. A similar trend is seen in Mapo Raemian Prugio in Ahyeon-dong, Mapo-gu, which has 3,885 households. The transaction volume was 15 in September but dropped to just 1 for two consecutive months in October and November. Dogok Rexle in Dogok-dong, Gangnam-gu, Seoul, consisting of 3,002 households, had 15 transactions in May, but only 3 transactions for two consecutive months in October and November.

In addition to the increased interest burden due to the prolonged high interest rates, with the upper limit of variable-rate mortgage loans at commercial banks recently exceeding 7%, the government's significant reduction of policy financing, including the general-type Special Bogeumjari Loan, is also reflecting on housing prices. In October, the Seoul apartment actual transaction price index fell by 0.08% compared to the previous month, marking the first negative change this year.

Kim Gyu-jung, head of the Asset Succession Research Institute at Korea Investment & Securities, said, "As a base rate cut is expected due to global interest rate reductions, buyers who are not in a hurry have become more cautious," adding, "It is expected that the number of areas where prices adjust will increase as transactions do not occur at the end of the year and the beginning of the next."

Yeo Kyung-hee, senior researcher at Real Estate R114, also said, "The decrease in transaction volume is the result of significantly weakened buyer sentiment due to increased interest burdens from rate hikes and worsened funding conditions caused by loan suppression measures," adding, "The gap between sellers' and buyers' desired prices remains, so transactions are expected to be difficult."

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