Following the government's announcement of household loan regulations, a wait-and-see attitude has spread in the Seoul real estate market, leading to a halt in purchase inquiries in the Songpa District areas of Gaekyung, Macheon, and Wirye, which were previously attracting many buyers due to their relatively low housing prices.
In particular, there are responses indicating that transactions have become difficult as residents of Gaekyung, Macheon, and Wirye who wanted to move to higher-quality areas through sales are unable to do so.
According to a representative from a certified real estate agency in Wirye New Town on the 4th, the asking prices in the nearby complexes have risen by over 100 million won, and homeowners are withdrawing their listings. The representative noted, "Homeowners are mostly those who, instead of raising prices to profit, had intended to sell their existing homes and move to higher-quality areas, but are now raising prices out of necessity due to the lending regulations," and added, "While purchase inquiries have not diminished significantly, transactions are expected to stagnate for a while due to rising prices."
The areas of Gaekyung, Macheon, and Wirye are geographically part of the Gangnam District but are relatively affordable, attracting many inquiries from actual demand. Particularly, Macheon-dong, where listings are priced around 1 billion won, has also seen investment interest. These areas have recently anticipated a "balloon effect" as housing prices in Gangnam have surged, leading to rising prices in nearby areas. In the past, although restrictions such as the redesignation of land transaction permission zones had resulted in some balloon effects, there are concerns of a decline in housing prices this time as actual demand has also decreased.
On the 27th of last month, the government announced measures to strengthen management of household debt, including restrictions on mortgages for multi-homeowners, reducing maturity of mortgages in the metropolitan area and regulated zones to within 30 years, capping housing purchase loans at 600 million won, and imposing a residence requirement within six months of execution of mortgages in the metropolitan area and regulated zones. While there are forecasts that the overheating of housing prices in central Seoul, including the Gangnam District, will ease, actual demand has also sharply declined, affecting even outer regions.
A representative from a real estate agency in Gaekyung-dong stated, "Compared to the central areas of the Gangnam District, prices were affordable, and until just before the policy announcement, purchase inquiries were active. Some homeowners raised prices with the expectation of additional price increases or withdrew their listings," adding, "However, following the announcement of lending regulations, most of the buyers who were considering purchases have retreated, and the number of inquiry calls has noticeably decreased."
A representative from a real estate agency in Macheon-dong also noted, "Homeowners who had listed their homes to move to higher-quality areas are unable to move due to the lending regulations, resulting in them raising prices or withdrawing their listings."
Wirye New Town is also showing a downward trend as it has not received any benefits from the station area due to delays in the start of the Wirye Line construction, with inquiries ceasing, leading residents to nearly give up. A representative from a real estate agency in Jangji-dong, Songpa District, noted, "As the Wirye Line project is adrift, some residents are expressing dissatisfaction, and expectations have also faded," and added, "With the lending regulations in effect, transactions are hardly taking place, and a long-term transaction cliff is expected."
However, there are responses indicating that the demand for moving from higher-quality areas to Gaekyung, Macheon, and Wirye is relatively low, resulting in less impact. A representative from a real estate agency in Macheon-dong stated, "There are large-scale redevelopment projects underway in areas such as Gaekyung and Macheon New Town, and there is demand from those selling homes in higher-quality areas, such as the central Gangnam District, to move to reconstruction complexes, meaning many individuals have sufficient cash reserves. They are likely to be largely unaffected," but added, "However, the significant increase in asking prices negatively impacts those who were considering entering this area, viewing it as the maximum entry point into the Gangnam District."
Experts explained that the strict regulations mean there is no appearance of a balloon effect in the outer areas. Even though there are development benefits such as the Gaekyung Macheon New Town and the Wirye Line, it is expected that the effects of the regulations will be stronger for a while. Seo Jin-hyung, a professor at Korea University of Technology and Education's Department of Real Estate Law, stated, "This policy was implemented to stabilize prices through transaction freezes as a demand suppression measure, so there will be a transaction cliff for a while," and added, "It appears that until the end of this year, the effect of regulations will be stronger than the development benefits."