Revival of 'Panic Buying'?… Housing Transactions Surpass 100,000 Again

Decline in August-September... Rebound Began Last Month
Cumulative Trading Volume Hits Record High Since Statistics Began

Monthly Nationwide Housing Sales Volume in November 2020 (Provided by the Ministry of Land, Infrastructure and Transport)

[Asia Economy Reporter Lee Chun-hee] In November, the nationwide housing sales transactions surged by 25.9% compared to the previous month, surpassing 100,000 units again. Amid the rising trend in the sales market that has not yet been fully captured, there are criticisms that the government's hasty enforcement of the two lease laws has triggered another wave of 'panic buying.'

According to the 'November Housing Sales Transactions' data released by the Ministry of Land, Infrastructure and Transport on the 24th, last month’s nationwide housing transactions amounted to 116,758 units, a 25.9% increase from 92,769 units in October.

Nationwide housing sales transactions had peaked at 141,419 units in July, then declined to 85,272 units in August and 81,928 units in September, but rebounded to 92,769 units last month after three months and recovered to over 100,000 units again.

Amid this rebound, the cumulative housing sales transactions for this year reached 1,139,024 units by last month, marking the highest ever since statistics began in 2006. Compared to recent transaction volumes, it jumped 65.8% from 686,857 units last year and increased 28.5% compared to the recent 5-year average of 886,628 units.

Although it seemed to enter a stabilization phase since August, the impact of the two lease laws, including the contract renewal request system and the rent ceiling system, has intensified the jeonse (long-term deposit lease) shortage, leading to a renewed spread of panic buying among demanders.

Cumulative November Housing Sales Volume by Year (Provided by Ministry of Land, Infrastructure and Transport)

Last month’s rise was concentrated outside the metropolitan area. Housing sales transactions in Seoul and the metropolitan area last month were 10,082 units and 41,117 units respectively, both decreasing by 5.1% and 1.8% compared to the previous month. In contrast, housing sales transactions in other regions surged by 48.7% to 75,641 units from 50,885 units the previous month.

By housing type, apartment transactions skyrocketed. Last month, apartment sales transactions reached 89,660 units, up 35.5% from the previous month and 34.3% compared to the same month last year. Non-apartment housing sales transactions were 27,098 units, increasing 1.9% from the previous month and 5.7% year-on-year.

Last month, nationwide jeonse and monthly rent transactions totaled 173,578 units, a slight increase of 0.4% from 172,815 units the previous month. The metropolitan area recorded 119,961 units, up 0.7% from the previous month, while other regions (53,617 units) decreased by 0.1%. Seoul saw a 0.6% increase to 55,978 units from 55,665 units the previous month.

By housing type, jeonse and monthly rent transactions for apartments decreased by 1.1% to 85,227 units from the previous month. Non-apartment housing transactions increased by 1.9% to 88,351 units.

However, the jeonse and monthly rent transaction volumes are counted only for contracts with confirmed dates and are not official national statistics.

In November, the nationwide housing sales volume surged by 25.9% compared to the previous month, surpassing 100,000 transactions again. [Image source=Getty Images]