"Yeongkkeul? Well..." 2030 Panic Buying Also Slows Down

View of downtown Seoul from Namsan, Seoul on the 11th. Photo by Mun Ho-nam munonam@

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Uncertainty is significantly affecting the 2030 generation, who had led the market until last year. Their 'panic buying' has slowed down. Due to loan regulations reducing their ability to purchase homes and the announcement of interest rate hikes, the buying sentiment of young people with relatively limited available assets appears to be weakening.

According to the Supreme Court Registry Information Plaza's 'Ownership Transfer Registration (Sale) Buyer Statistics' on the 20th, the proportion of the 2030 generation among those who purchased a collective building (apartments, row houses, multi-family houses, officetels, etc.) for the first time in their lives in Seoul during the first quarter of this year was 55.38%. This is a decrease of 6.24 percentage points compared to 61.62% in the same period last year.

During the Moon Jae-in administration, continuous real estate price increases led the 2030 generation to develop the perception that 'if not now, they will never be able to buy a home.' From 2020, they entered the market 'pulling together even their souls.' Their share of first-time real estate purchases peaked at 63.38% in the fourth quarter of 2020 and remained high into 2021. However, the mood began to decline in the fourth quarter of last year, recording 57.37%, and the downward trend has become more apparent this year.

The decisive factor seems to be loan regulations. Since July last year, the government has applied a Debt Service Ratio (DSR) of 40% when obtaining mortgage loans for homes over 600 million KRW or credit loans over 100 million KRW in regulated areas. From October, financial authorities introduced 'strengthened household debt management measures,' making loans even more difficult to obtain. Recently, overall transactions have become rare due to market uncertainty, and the properties that do come up far exceed the financial capacity of the 2030 generation, contributing to a 'wait-and-see' stance.

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Last month, the price of medium-sized apartments (exclusive area over 85㎡ up to 102㎡) in the Seoul metropolitan area, including Seoul, Gyeonggi, and Incheon, surpassed 1 billion KRW for the first time, reaching 1,009.18 million KRW. In Seoul alone, it reached 1,610.59 million KRW. Homes priced over 600 million KRW are not eligible for the Bogeumjari Loan, a mortgage product for ordinary citizens, and loans are not available at all for homes exceeding 1.5 billion KRW.

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