Seoul Apartment Sales Volume Plummets Amid Successive Measures
But Purchase Share by 30s Hits All-Time High
High Sale and Jeonse Prices Make Subscription Difficult
If Anxiety Persists, Panic Buying May Rise Again
[Asia Economy Reporter Moon Jiwon] Although apartment sales transactions in Seoul have sharply contracted, the proportion of home purchases by people in their 30s has rather increased. This is analyzed as the government's strong regulations and supply expansion policies failing to quell the anxiety of young people caused by soaring housing prices. If the surge in jeonse prices continues, there is also a possibility that 'panic buying' among the 30-40 age group will expand.
According to the apartment sales status announced by the Korea Real Estate Board on the 21st, the number of apartment sales transactions in Seoul last month was 6,880, down 57.0% from 16,002 transactions the previous month. The number of apartment sales in Seoul showed an increasing trend from 3,699 in April to 4,328 in May and 11,106 in June, but after the July 10 real estate measures and the August 4 housing supply expansion plan announcements, buying momentum weakened, and last month's transaction volume sharply declined.
However, despite this decrease in transaction volume, the proportion of people in their 30s in total home purchases actually increased. Last month, the share of people in their 30s in total transactions recorded 36.9%. This is the highest proportion among all age groups and the highest since the Korea Real Estate Board began statistical surveys by buyer age group in January last year.
The proportion of apartment purchases by people in their 30s has steadily increased this year: 28.5% in April, 29.0% in May, 32.4% in June, and 33.4% in July. The gap in sales ratios between people in their 30s and 40s also nearly doubled, increasing from 4.6 percentage points in July to 8.6 percentage points last month. This is in stark contrast to the first half of last year when the purchase proportion of people in their 30s remained in the high 20% range.
Although Kim Hyun-mi, Minister of Land, Infrastructure and Transport, said at the National Assembly at the end of last month that it was "regrettable" that people in their 30s were buying homes by "yeongkkeul" (borrowing to the limit), this buying sentiment has hardly been subdued.
People in their 30s had the highest purchase proportions in all areas of Seoul except for Gangnam, Seocho, Songpa districts, which have many high-priced apartment complexes, and Yangcheon district. The purchase proportions were especially high in outer areas such as Gangseo-gu (46.5%) and Seongbuk-gu (45.0%), and also exceeded 40% in Dongjak-gu (44.1%), Seodaemun-gu (43.3%), Dongdaemun-gu (43.2%), and Guro-gu (42.6%). This is analyzed as the 30s buyers, who have difficulty securing funds due to strengthened government loan regulations, turning their attention to mid- to low-priced apartments.
However, due to the overall contraction in transactions, the total number of purchases by people in their 30s also sharply dropped from 5,345 in July to 2,541 last month. With the recent weakening of buying sentiment in Seoul and the full-scale start of pre-subscription for the 3rd new town from July next year, the 30s age group is increasingly adopting a wait-and-see stance. An industry insider predicted, "If Seoul housing prices do not turn negative despite successive measures, the anxiety among people in their 30s will grow, and they may engage in panic buying again."
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