After One Month of June 27 Measures, Metropolitan Area Price-Decrease Transactions Up 4.1%p... Sejong Also Rises by 10%p

Proportion of Transactions with Price Increases Slows Nationwide in July
Impact of June 27 Measures Clearly Felt in the Metropolitan Area

Since the implementation of the June 27 real estate loan regulations, the metropolitan apartment market has cooled rapidly. In both Seoul and Gyeonggi Province, the number of transactions with price increases has declined, while transactions with price decreases have risen, making the market's weakness more apparent. The concentration of stringent loan restrictions in the metropolitan area has increased the burden of purchasing not only for investors but also for actual homebuyers.

According to an analysis released on August 11 by real estate platform Zigbang, based on transaction data from the Ministry of Land, Infrastructure and Transport, the proportion of apartment transactions nationwide with price increases in July was 44.4%, down 2.1 percentage points from 46.5% in June. During the same period, the share of transactions with price decreases rose by 3.4 percentage points, from 38.4% to 41.8%.

The weakness in the metropolitan area is particularly pronounced. In July, the proportion of transactions with price increases in the metropolitan area was 45.0%, down 3.1 percentage points from June, while the proportion of transactions with price decreases increased by 4.1 percentage points, from 35.1% to 39.2%. In Seoul, transactions with price increases dropped from 53.2% to 51.1%, while those with price decreases rose from 30.4% to 34.0%. In Gyeonggi Province, transactions with price increases declined from 46.0% to 43.2%, and those with price decreases expanded from 37.1% to 40.6%. In Incheon, there was little change in the share of transactions with price increases, but the proportion of transactions with price decreases edged up from 40.6% to 42.2%.

National Apartment Price Increase and Decrease Transaction Trends (Left), Metropolitan Area Transaction Share. Provided by Zigbang

There was little change in the provinces. In July, the proportion of apartment transactions with price increases in the provinces was 44.0%, and those with price decreases was 43.5%, both similar to June. However, Sejong City saw a clear shift toward price decreases. The proportion of transactions with price increases fell by 7.2 percentage points, from 48.9% to 41.7%, while those with price decreases rose by 9.9 percentage points, from 35.4% to 45.2%. This is interpreted as a cooling of buying sentiment due to waning expectations for development, such as the relocation of the administrative capital.

Zigbang assessed that the difference in market temperature between the metropolitan area and the provinces stems from the June 27 real estate measures. The latest measures include a mortgage loan cap of 600 million won and a ban on jeonse loans before the transfer of ownership registration, among other stringent loan regulations, with the regulations concentrated in the metropolitan area and other regulated regions. In key areas such as Seoul and Gyeonggi Province, buying sentiment has cooled rapidly, resulting in a wait-and-see approach in the market.

If sluggish transactions persist, some areas could face increased pressure for price adjustments. The declining proportion of transactions with price increases indicates weakening buying sentiment. However, some expect that the extent of price declines will be limited due to ongoing supply uncertainties. Concerns that the types and locations of homes desired by actual buyers may not be supplied in a timely manner continue to support market prices.

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