As the government announced high-intensity loan regulations limiting housing loans to 600 million won on the 27th of last month, cases of apartment sales contract cancellations have been emerging.
According to the Ministry of Land, Infrastructure and Transport's actual transaction disclosure system on the 6th, there were 125 cases of apartments in Seoul with contract dates from the 20th of last month to the 3rd of this month where the reason for contract cancellation occurred after the 27th.
By date, there were 39 transactions on the day of the announcement (27th) where the reason occurred, which is the most. Of the 65 contracts that were made between June 20th and 26th before the announcement and later canceled, 25 specified the announcement date as the reason for cancellation.
Market observers report that some buyers, who anticipated a continuing rise in housing prices, applied for large-scale loans but canceled transactions urgently, accepting the loss of the deposit due to concerns over investment losses once the loan regulations were introduced.
The representative of a real estate brokerage in Banpo, Seocho District, Seoul, said, "A significant portion of the demand entering the Gangnam area buys with loans of at least 1 billion won," adding, "That demand is likely to decrease significantly for the time being."
There are predictions that the trend of the Seoul apartment market turning cautious will continue for some time. President Lee Jae-myung previously described the loan regulations as "just a taste," noting, "There are still a tremendous number of demand suppression measures left."
According to a report by real estate research firm Real Today, which analyzed the Ministry of Land, Infrastructure and Transport's actual transaction data for 25 autonomous districts in Seoul, a total of 577 apartment transactions occurred from the 27th of last month to the 3rd of this month. This represents a decrease of 1,052 transactions (64.6%) from the previous week (June 20th to 26th), which had 1,629 transactions.
The market sees it as likely that regulatory areas will expand, including adjustment target areas, speculative overheating zones, and land transaction permission areas. There are also proposals to strengthen the loan-to-value ratio (LTV) for regulated housing and to expand the application of the debt service ratio (DSR) to jeonse loans and policy loans.
The representative of a real estate office in Daechi-dong, Gangnam District, said, "The rise that had been increasing by tens of millions has suddenly stopped after the announcement of loan regulations," adding, "There is a mood to watch over this as additional regulations may come."