The volume of apartment transactions in Seoul dropped by about 70% before and after the implementation of loan regulations. While the market has largely adopted a wait-and-see stance, some complexes in the Gangnam area of Seoul continue to see record-high transactions at prices higher than previous deals. In Gangnam, buying sentiment has also risen for the second consecutive week, leading to speculation that the impact of the loan regulations may have already run its course.

According to data from the Seoul Real Estate Information Plaza on August 12, the number of apartment transactions in Seoul reached 11,981 in June, the highest monthly figure so far this year. In contrast, the number of transactions in July was 3,654, a 70% decrease. Although there is still time left to report July transactions until the end of this month, the intensified wait-and-see sentiment due to the loan regulations makes it unlikely that the number of reported deals will increase significantly.

Compared to early June, when buying demand surged around the launch of the Lee Jaemyung administration, the number of apartment listings in Seoul has decreased by nearly 10%. According to the real estate big data platform Asil, the number of apartments for sale in Seoul fell from 82,307 as of June 6 to 75,187 as of August 6.

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About six weeks after the implementation of the June 27 loan regulations, apartment prices in Seoul are rebounding in certain areas. According to KB Real Estate, the week-on-week transaction price change rate for the first week of August rose by 0.11%, marking the 28th consecutive week of increases. Songpa-gu (0.31%), Dongjak-gu (0.24%), Gangnam-gu (0.23%), Seocho-gu (0.19%), and Yongsan-gu (0.17%) recorded the highest increases. In the Korea Real Estate Board's "Weekly Apartment Price Trends Nationwide," Seoul apartment prices rose by 0.14% in the first week of August (as of the 4th), up from 0.12% the previous week.

Buying sentiment in the Gangnam area is gradually recovering. The Seoul Buyer-Seller Index, an indicator of real estate sentiment, stood at 56.8 for the 11 districts of Gangnam in the first week of August, up 0.9 points from the previous week, marking a slight increase for the second consecutive week. In contrast, the 14 districts of Gangbuk recorded 42.7, a decrease of 2.8 points from the previous week.

Despite unprecedented loan regulations, record-high transactions continue in the three Gangnam districts. In the reconstruction complex Jamsil Jugong Complex 5, a 76㎡ unit was sold for 4.177 billion won on July 11, setting a new record. An 82㎡ unit also changed hands at a record price of 4.525 billion won. At Raemian Daechi Palace, a 151㎡ unit was sold for 6.3 billion won on July 14, which is 150 million won higher than the previous transaction.

Property listings posted at real estate agencies in Seoul city. Yonhap News

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A 74㎡ pre-sale right at Jamsil Raemian I'Park was sold for 3.1 billion won, 218 million won higher than the previous record. Ham Youngjin, head of the Real Estate Research Lab at Woori Bank, analyzed, "Rather than interpreting this as an adaptation to loan regulations, this phenomenon is seen in markets where there are few listings and sellers have the advantage, particularly in areas less sensitive to loan regulations due to the requirement for actual residency in land transaction permit zones."

There are also forecasts that a surge in monthly rent and lease prices could reignite buying demand. Ham added, "Depending on changes in monthly rent and lease prices during the autumn moving season, demand could shift back to purchases," and noted that "loan regulations, delays in interest rate cuts, the effectiveness of government supply measures, and U.S. interest rate cuts are all variables."

The continued decrease in leading supply indicators such as permits, construction starts, and completions over the past four years is also causing concern among buyers. According to the Housing Industry Research Institute, the cumulative supply shortage over the past four years is estimated at 298,000 units in the Seoul metropolitan area and 68,000 units in Seoul, compared to the annual average. The number of private housing permits in Seoul this year is 27,000 units, down 6,000 from last year, while construction starts have increased by 11,000 to 34,000 units compared to last year.

Experts believe that as the three Gangnam districts remain highly sought after and the market continues to favor sellers, the "one smart home" phenomenon is likely to persist, sustaining the upward trend. Yoon Sumin, a real estate specialist at NH Nonghyup Bank, commented, "Core complexes are still seller-dominated, and for buyers with substantial cash reserves, this can actually be an opportunity to purchase. The continued record-high transactions indicate that the current market sentiment cannot be subdued by loan regulations alone."

Yang Jiyeong, head of Asset Management Consulting at Shinhan Investment Corp., explained, "When measures similar to the June 27 loan regulations were introduced in the past, their effects lasted about six months before rebounding, but this time the recovery appears to be happening faster. Compared to the past, supply is more limited and there are more cash-rich buyers, which has led to price increases in key areas and intensified the phenomenon where asking prices become market prices due to a shortage of listings."