In April, the proportion of rising transactions in the apartment sales in Sejong City recorded the highest level in the past 22 months. It is believed that the political debates around the transfer of the administrative capital ahead of the presidential election on the 3rd of next month influenced this.
According to an analysis by the real estate platform Zigbang of the Ministry of Land, Infrastructure and Transport's actual transaction data, 43.7% of apartment sales transactions nationwide in April were conducted at higher prices compared to previous transaction prices. This indicates a halt in the rising trend that had continued for the past four months, reflecting a cautious sentiment in the apartment transaction market due to ongoing domestic and international uncertainties.
The proportion of rising transactions in the metropolitan area decreased by 1.7 percentage points (p) to 43.7%, while in the provinces, it remained at a similar level of 43.6% compared to the previous month (43.5%). In the metropolitan area, the proportions were 46.8% (-2.9%p) for Seoul, 42.5% (-0.7%p) for Gyeonggi, indicating a decrease in rising transaction proportions, while Incheon saw a slight increase to 43.6% (1.0%p).
Following the reassignment of the land transaction permit system in March, except for some localized rising trends centered around Gangnam, the market overall is showing a strong cautious sentiment. Although transactions continue in some high-priced complexes like Gangnam, in most areas, the buying trend has slowed, and it appears that the proportion of rising transactions has also decreased, Zigbang explained.
In the provinces, the proportion of rising transactions in Sejong Special Autonomous City (hereinafter referred to as Sejong City) has significantly increased. The rising transaction proportion in Sejong City is 52.7%, marking an increase of 7.4%p compared to the previous month (45.3%), setting the highest level in the last 22 months (53.2% in June 2023).
This is the highest figure among the rising transaction proportions by province in April. In April alone, the total number of apartment sales transactions in Sejong City was 1,197, of which 631 were transacted at prices higher than the previous transactions.
A Zigbang official noted, "The increase in real demand and investment demand around Sejong City seems to be significantly influenced by recent promises regarding the transfer of public institutions and the expansion of infrastructure," and added, "Specifically, it is analyzed that the inflow of buying interest based on a perception of a low point has contributed to the increase in the proportion of rising transactions amid market corrections driven by the burden of previously increased prices and concentration of supply." He further remarked, "Here, the potential realization of the transfer of the administrative capital and the transfer plans of public institutions is becoming apparent, revealing the re-evaluation of its value as a residential area behind it."
By district, Gowoon-dong had the highest number of transactions at 83, followed by Saerom-dong at 66, Dodam-dong at 63, Dajeong-dong at 63, and Jongchon-dong at 60. A 59㎡ unit in complex 6 of Garak Village in Gowoon-dong was transacted at about 10% higher than the previous average transaction price of 345 million won, at 380 million won, and a 84㎡ unit in complex 7 of Saetdeum Village in Saerom-dong was sold for 570 million won, representing an 11% increase compared to the previous average transaction price of 515 million won.
The local provinces experiencing an increase in the proportion of rising transactions include Gwangju Metropolitan City at 44.8% (2.4%p) and Jeonnam at 44.6% (2.2%p), primarily in the Honam region where rising transactions have grown. The barriers to price entry are lower compared to the metropolitan area, resulting in increased rising transactions focused on smaller units in areas such as Buk-gu in Gwangju and Jeonnam.
A Zigbang official remarked, "While the national market continues to show a dominant cautious sentiment, some regions are showing rebound flows due to individual factors such as policy expectations and developmental incentives," adding, "It appears that potential demand in regions with clear growth potential or investment attractiveness is gradually preparing to move. "
He added, "At this point, a careful judgment is needed that considers medium to long-term market trends, policy effectiveness, and structural conditions by region, rather than concluding the market direction based solely on short-term price changes."