After a night’s sleep, apartment prices jump by tens of millions of won, with some rising by 100 million won in just one day. There are also those who put down a deposit of 100 to 200 million won but found themselves in a difficult situation as loans suddenly became unavailable.” (A representative from a certified real estate agency in Shinchon-dong, Songpa-gu, on the 30th)
Following the government's announcement of stringent lending regulations (the 6.27 measures) on the 27th of last month, the once bustling real estate market in Seoul has rapidly cooled. In the Jamsil area of Songpa-gu, major apartments saw a wave of contract cancellations after the 6.27 measures were announced, leading to a stagnation in transactions. On the other hand, the real estate market in Nowon, which has many mid-range apartments and is less affected by lending regulations, is experiencing an increase in inquiries from buyers.
Summarizing the accounts of representatives from real estate agencies near Jamsil, such as Shinchon-dong and Jamsil-dong, cases of buyers abandoning contracts have emerged following the lending regulations announced on the 27th of last month.
A representative from a real estate agency operating in Shinchon-dong, Songpa-gu, said, “Currently, the cases of contract cancellations disclosed in the Ministry of Land, Infrastructure and Transport's real transaction disclosure system are those where homeowners returned twice the deposit to buyers after raising the asking price and canceled the contracts.” They added, “Since the 27th, it has become impossible to apply for land transaction permits in Songpa-gu, so there have been many cases where deposits were lost prior to formal contracts.”
In the case of Jamsil, where the land transaction permit system (the land transaction regulations) is applied, confusion arose on the 27th as buyers rushed to submit permit applications. In designated areas under these regulations, one must first submit a land transaction permit application to the district office to purchase an apartment. The 6.27 measures, effective from the 28th, restrict loans for housing valued at over 600 million won only to those who submitted a permit application by the 27th of this month.
A representative from a real estate agency in Shinchon-dong commented, “Last week, there were only a few staff members in charge in Songpa-gu, but the number of land transaction permit applications was overwhelming, making it practically impossible to handle the paperwork, and they refused applications, causing quite a stir.” They explained, “Up until the permit application, only deposits were put down without formal contracts, and if they cannot apply, the path for loans is blocked, putting buyers with insufficient funds at risk of losing their deposits.”
B added, “A 84㎡ unit at Park Rio apartments was trading for about 2.5 billion won until just a month ago, but it has jumped to 2.9 billion won this month.” They noted, “Recently, a person who was inclined to buy the same area at 2.9 billion won withdrew urgently just before putting down the deposit after learning that loans would be difficult due to the 6.27 measures.”
However, despite the 6.27 measures, real estate representatives noted that homeowners of major apartments in Jamsil are not significantly lowering their asking prices or hastening sales. They indicated that only occasional inquiries are received regarding the availability of properties for quick sale due to the 6.27 measures.
A representative from the real estate industry in the Jamsil area, referred to as C, commented, “Major complexes in Jamsil like Elite (Els, Ricents, Tridium) have not seen significant drops in asking prices or an increase in listings even after the enforcement of stricter lending regulations.” They elaborated, “In Shinchon-dong, homeowners are mostly not in a rush for funds, with many buying up other apartments ahead, so there has not been much fluctuation in asking prices.”
On the other hand, the real estate market in Nowon, which has many apartments priced under 1 billion won, continues to see a steady stream of inquiries from buyers trying to catch both ‘rabbits’ of actual residence and investment even after the 6.27 measures.
According to the real estate industry in Nowon, expensive apartments such as Dongshin Apartments and Sangyeji Apartments 5 are being evaluated for their rapid reconstruction speed, with homeowners retracting listings or postponing contracts. The common opinion among representatives from real estate agencies in Wolgye and Sangye-dong is that prices are gradually trending upwards in response to steady buyer inquiries.
A representative from a real estate agency located in Sangye-dong, Nowon-gu, commented, “The government has imposed stringent lending regulations on high-priced apartments subject to the land transaction permit system, so mid-range apartments in Nowon are likely to benefit instead.” They explained, “In Sangyejugu Apartments, transactions have been frequent, and the asking price for a 31㎡ unit available for actual residence has risen to the high 400 million won to 500 million won range.
They noted, “The expected reconstruction contribution for Sangyejugu Apartments 5 is substantial, ranging from 600 to 700 million won.” However, they added that “especially many inquiries come from buyers in their 30s who believe they will need to pay more if they delay their buying timing.”
E, a representative from a real estate agency in Wolgye-dong, also stated, “In Nowon, there have been many recent inquiries about Dongshin Apartments, located across from the Gwangwoon University station development area, which has already received reconstruction management disposal approval.” They mentioned, “The smallest available 71㎡ unit is already on hold as homeowners have postponed contracts, and a 93㎡ unit, which is planned for a 59㎡ assignment after reconstruction, is priced at 750 million won.”