January 43,000 Housing Transactions 'Stir'... "Not a Sign of Recovery"

Housing Sales Transactions in January Totaled 43,033
Up 13.1% Compared to December Last Year
Causes Are Complex... Not a Sign of Recovery

The number of housing sales last month showed a surprising increase. Compared to the same month last year, it rose by as much as 67%. Experts noted this sudden surge in transaction volume but analyzed that it is difficult to see it as a sign of a full-fledged recovery.

According to the 'January Housing Statistics' announced by the Ministry of Land, Infrastructure and Transport on the 29th, the number of housing sales in January this year was 43,033, an increase of 13.1% compared to December last year (38,036). Compared to January last year (25,761), it rose by 67%. However, it is still 30.5% lower than the average housing transaction volume for January over the past five years.

The volume of housing transactions in Seoul during the same period was 4,699, up 15.4% from the previous month. The metropolitan area recorded 17,608 transactions, up 16.7%. The provinces also rose by 10.8% to 25,425 transactions. Compared to the same period last year, Seoul, the metropolitan area, and the provinces increased by 77.9%, 71.0%, and 64.4%, respectively.

Reasons for the Increase in Transaction Volume

Experts analyzed that the sudden increase in transaction volume this year is due to a combination of several factors, including the base effect, depletion of urgent sale properties, rising jeonse (long-term deposit lease) prices, newborn special loans, and the reduction of bank loan limits.

Park Won-gap, Senior Real Estate Specialist at KB Real Estate, explained, "The sales of the special general housing loan product, which had driven the increase in housing transactions since October last year, were suspended, causing a sharp drop in transactions in November and December. From January this year, transactions have slightly increased again. There was some demand to buy older apartments as jeonse prices and pre-sale prices soared, and some buyers purchased homes in January ahead of the introduction of the stress DSR (Debt Service Ratio) on the 26th of this month, which reduced loan limits."

Apartment complex in Gayang-dong. Photo by Jo Yongjun jun21@

Ham Young-jin, former Head of the Zigbang Big Data Lab, analyzed, "Due to transactions mainly focused on urgent sales and the news of the launch of newborn special loans, transaction volume slightly increased compared to December last year, but housing sale prices remain as low as in early 2013." A representative from the Korea Real Estate Board also said, "There were inquiries mainly for urgent sale properties last month, but as the inventory backlog continued, the price decline widened."

According to KB Real Estate, the nationwide housing sale price in January fell by 0.08% compared to the previous month, and apartment prices dropped by 0.11%. Considering these factors, experts believe it is difficult to see the increase in housing transaction volume in January as a rebound signal, and the 'bottoming out' phase is expected to continue until the first half of this year.

Increase in Jeonse and Monthly Rent Transactions

The volume of jeonse and monthly rent transactions in January was recorded at 247,622. This is an increase of 17.1% from the previous month (211,403) and 15.3% from the same month last year (214,798). Last month, monthly rent transactions (138,425) outnumbered jeonse transactions (109,197). This is the result of people still reluctant to buy homes due to the housing price watchfulness and those seeking monthly rent to avoid jeonse fraud. Park Won-gap explained, "Due to risks surrounding the jeonse market, there are cases where jeonse, monthly rent, and sales move in the same direction, as seen last month. Also, the winter vacation period caused some moving demand."

At the end of January, the total number of unsold houses nationwide was 63,755, an increase of 2% from the previous month (62,489). The number of unsold houses classified as malignant unsold after completion was 11,369, up 2.2% from the previous month (10,857). The number of malignant unsold houses has exceeded 10,000 units for four consecutive months.

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