The government's ultra-tight loan regulations have resulted in a decline in both the transaction volume and transaction prices in the actual Seoul apartment market.
On the 6th, real estate research firm Real Today analyzed the actual transaction prices from the Ministry of Land, Infrastructure and Transport for 25 autonomous districts in Seoul, finding that a total of 577 transactions took place in Seoul apartments during the week from the 27th of last month to the 3rd of this month. This is a decrease of 1,052 transactions (64.6%) compared to the previous week (June 20-26) with 1,629 transactions.
The government announced a high-intensity loan regulation policy prohibiting housing loans over 600 million won on the 27th of last month, which went into effect the following day (28th).
Since it will take about a month for transaction reports to be completed, the transaction volume could increase further. However, looking at the transactions in the so-called 'booming' areas of Gangnam (Gangnam, Seocho, Songpa districts) and Mayongseong (Mapo, Yongsan, Seongdong districts) before the announcement of the policy, there has been a sharp decrease.
The transaction volume in the Gangnam area decreased by 95.8% in Songpa (from 24 transactions to 1), 93.3% in Seocho (from 15 transactions to 1), and 68.4% in Gangnam (from 76 transactions to 24). Mapo saw a decrease of 66.3% (from 86 transactions to 29), Yongsan 21.4% (from 14 transactions to 11), and Seongdong 53.8% (from 93 transactions to 43).
Even the areas on the outskirts of Seoul, which were expected to become relatively more preferred, have also seen a freeze in transactions.
Nowon saw a decrease of 58.0% (from 143 transactions to 60), Dobong 47.9% (from 48 transactions to 25), and Gangbuk 28.6% (from 21 transactions to 15). Geumcheon recorded a decrease of 73.1% (from 26 transactions to 7), Gwanak 62.7% (from 59 transactions to 22), and Guro 65.8% (from 79 transactions to 27).
In the week following the announcement of the loan regulations, the transaction volume in all 25 autonomous districts in Seoul decreased. Among these, the decrease in transaction volume in 22 areas, excluding Yongsan, Dobong, and Gangbuk, exceeded 50%.
The transaction amount also decreased across all 25 autonomous districts from the 27th of last month to the 3rd of this month, showing a total reduction of 67.3% to 631.9 billion won compared to the previous week.
During the week before the policy announcement, Gangnam district, which recorded the highest transaction amount at 222.3 billion won, showed a decrease of 71.3% to 6.37 billion won. Seocho experienced a drastic drop of 97.0% to 150 million won, while Songpa saw an 89.9% decrease to 430 million won. Nowon recorded a decrease of 61.0% (to 3.4 billion won), Dobong 51.1% (to 1.26 billion won), and Gangbuk 36.0% (to 850 million won), among others.