Seoul Apartment Sales Volume Drops 18% in March... End-User Demand Focused on Units Under 1.5 Billion Won

Last month, the number of apartment transactions in Seoul dropped by nearly 18% compared to the previous month. With transactions of apartments priced at 1.5 billion won or less accounting for more than 85% of the total, the market appears to be shifting toward end-users.

A view of an apartment complex in downtown Seoul. Photo by Yonhap News.

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According to the Seoul Metropolitan Government on April 20, the number of apartment transactions in Seoul in March was tallied at 4,742, a 17.7% decrease from the previous month. Considering that the reporting deadline for real estate transactions is within 30 days of the contract date, and that reports for March contracts can be filed until the end of April, it is possible that the transaction volume may increase further in the future.

By transaction amount, last month, apartments priced at 1.5 billion won or less accounted for 85.3% of the total, up 3.8 percentage points from the previous month. Since November last year, transactions of apartments in this price range have been on the rise. The city explained, "For apartments priced at 1.5 billion won or less, up to 600 million won can be borrowed with a mortgage loan. As the government continues its stance on loan regulation, the sales market is shifting from investment demand to being centered on end-users."

By district, Nowon-gu recorded the highest number of transactions at 663, followed by Guro-gu, Gangseo-gu, Seongbuk-gu, and Eunpyeong-gu. These districts are known for their concentration of mid- to low-priced apartments favored by end-users, and transactions involving apartments priced at 1.5 billion won or less accounted for over 99% in these areas.

Last month, the number of jeonse (lump-sum lease) transactions for Seoul apartments was 9,441, down 0.7% from the previous month. Meanwhile, the number of monthly rental transactions was 9,312, up 6.4% over the same period.

After the number of monthly and jeonse transactions soared to 25,000 in December last year, it declined in February this year. However, last month saw a rebound in monthly and jeonse transactions. In March, the proportion of jeonse transactions was 50.3%, showing a gradual decrease, while the proportion of contract renewals among jeonse transactions remained above 50% for the second consecutive month.

The city noted, "With the strengthening of requirements for actual residence, the supply of jeonse listings has decreased. This, together with rising jeonse prices and tighter loan regulations, has created a situation where increased deposits for new jeonse contracts and higher moving costs have led to a greater tendency for existing tenants to renew their contracts."

Meanwhile, in February this year, the actual transaction prices for apartment sales in Seoul rose by 1.9% compared to the previous month. Most regions saw increases, with both the northeastern and southeastern areas recording a notable rise of 2.35%. By size, all segments saw price increases, but small apartments (with exclusive area over 40m² and up to 60m²) stood out with a 2.95% rise, marking the most significant increase.

In February, the actual transaction prices for jeonse in Seoul apartments increased by 0.22% from the previous month. Among the regions, the northeastern area posted the largest increase at 0.85% month-on-month. The southeastern area rose by 0.65%, while the central area dropped by 0.37%. By size, all segments except large apartments (exclusive area over 135m²) saw increases, with mid-sized to small apartments (exclusive area over 60m² and up to 85m²) posting the highest growth at 0.48%.

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