In February, following the lifting of the land transaction permit zone in the Jamsam District (Jamsil, Samsung, Daechi, Cheongdam), the proportion of purchases of apartments in Seoul by non-residents increased by nearly 50%. As house prices in major areas of Seoul began to rise, it seems there has been an increase in investment in apartments in the Gangnam area, which is perceived as a stable investment.
On the 9th, an analysis of apartment sales transactions by the Korea Real Estate Board based on the residency of purchasers showed that the number of purchases of apartments in Seoul by non-residents in February reached 1,193, marking a 48.56% increase compared to the previous month. After declining continuously since August of last year, the number of purchases by non-residents in February saw its first rebound.
The proportion of purchases by non-residents among all apartment transactions in Seoul recorded 25.15% in February. This is 2.31 percentage points higher than the proportion of non-resident purchases of 22.84% last year. It is also higher than the levels observed in 2023 (24.57%), when investment from outside the city increased.
Among Seoul's districts, there was a noticeable influx of non-residents into the three Gangnam districts (Gangnam, Seocho, Songpa). In February, the district with the highest number of apartment purchases by non-residents was Songpa (92 purchases). Gangnam (86 purchases) and Seocho (65 purchases) were also among the top five districts in Seoul for purchases by non-residents.
Based on the proportion of purchases, the three Gangnam districts, excluding Songpa, had a relatively high share of non-residents. The proportion of non-resident apartment purchases in Gangnam was 25.98%, while Seocho recorded 25.79%. In Songpa, this proportion was 23.68%. This can be interpreted as a result of increased demand for upgrading to higher-quality properties within Seoul, causing rapid increases in transactions compared to other districts, slightly lowering the proportion of non-residents.
Additionally, the following districts were noted for high proportions of purchases by non-residents: ▲Gangdong (80 purchases, 25.16%) ▲Nowon (80 purchases, 25.48%) ▲Seongdong (68 purchases, 24.29%) ▲Gangseo (65 purchases, 29.68%) ▲Mapo (64 purchases, 28.19%). In Yongsan, however, the number of purchases by non-residents was limited to 16, with their proportion in overall transaction activity only reaching 18.18%.
The recent uptick in investment from outside Seoul, which had been in a lull, appears to be due to expectations of rising house prices following the lifting of the land transaction permit. As the downturn in the real estate market in regional areas continues for an extended period, the polarization between Seoul and the provinces seems to have deepened, leading to increased demand for investment in major areas of Seoul through "a quality property."
There are also analyses suggesting that as gap investments became possible in previously inaccessible regions, a last-minute demand to gain profits has emerged. In the three Gangnam districts, the gap investment ratio, where minimal capital is used to purchase dwellings through jeonse and loans, rose to 43.60% in February, up from 35.20% the previous month.
Kim Hyo-sun, chief real estate officer at NH Nonghyup Bank, noted, "Amid the ongoing crisis of regional extinction, local asset holders are showing a strong interest in housing in the Gangnam area, which is perceived as a safe asset," adding, "In February, regions that were previously not transacted were opened up after the lifting of the permit, allowing for purchases for investment purposes by non-residents even if they don’t actually reside there."
Park Won-gap, chief real estate expert at KB Kookmin Bank, stated, "While some purchases may have been made in terms of upgrading to better properties or a quality property, demand for gap investments has emerged," adding that "due to last-minute gap investments in areas like the three Gangnam districts, a premium has been attached, indicating a bubble in the short term."