Seoul Lightning Poor Fear... First-Time Real Estate Purchases Surge

33% of Real Estate Buyers in the First Half of This Year Are First-Time Buyers
6 out of 10 Are in Their 20s and 30s... Severe Panic Buying and FOMO

In the past 1 to 2 years, housing prices have surged significantly, with the average cost of purchasing a small to medium-sized apartment in Seoul exceeding 1 billion won. The photo shows the price board at a real estate agency in Mapo-gu, Seoul, in the afternoon of the same day.

As Seoul housing prices continue their soaring trend, the number of people who purchased real estate in Seoul for the first time in their lives last year has significantly increased. This is interpreted as a result of the younger generation engaging in a series of 'panic buying' as housing prices skyrocketed despite the government's successive real estate measures.

According to the Court Registry Information Plaza on the 2nd, the number of first-time real estate acquirers in Seoul in the first half of this year was 48,679, accounting for 32.7% of the total. A first-time acquirer refers to a person who obtained ownership for the first time in their life through a 'sale.' The proportion of first-time acquirers dropped to a record low of 24.4% in the first half of 2019 but has been steadily increasing since then. Considering that the June data has not yet been finalized, the number and proportion of first-time acquirers in the first half of this year are expected to rise further. Although the target real estate includes buildings and land besides houses, the court explained that over 90% are apartments or other types of housing.

By age group, real estate acquisitions by the 20s and 30s generation stood out. Among first-time acquirers of Seoul real estate, the number of people in their 30s nearly doubled, increasing by 95.3% from 25,121 in the first half of 2019 to 49,068 in the first half of this year. Their share of the total age groups also rose by 4.3 percentage points from 40.8% to 45.1% during the same period. The proportion of those in their 20s also increased by 2.3 percentage points from 13% (3,267 people) to 15.3% (7,528 people). This means that 6 out of 10 people who registered as first-time owners in the Seoul real estate registry in the first half of this year belong to the 20s and 30s age group.

The increase in real estate acquisitions among the younger generation is analyzed to be due to buyers viewing the future market outlook with anxiety. Kim Seong-hwan, a senior researcher at the Korea Research Institute for Construction Industry, explained, "The government has promised housing price stabilization and told buyers to 'wait,' but since prices have risen so much, the demand to 'buy now rather than later' is increasing."

Ko Jun-seok, an adjunct professor at Dongguk University Law School, also diagnosed, "In the past, newlyweds often made first-time purchases, but recently, even unmarried individuals are buying homes," adding, "This is also due to anxiety over the housing price surge."

Experts point out that considering the increase in first-time real estate acquisitions by the 20s and 30s generation has a strong characteristic of 'FOMO (Fear of Missing Out) syndrome,' the ultimate solution is an active expansion of supply in various ways. FOMO syndrome refers to anxiety about missing out or being excluded from trends. Professor Ko said, "Fundamentally, only by signaling through supply expansion that housing prices will not skyrocket can the buying frenzy calm down."

There are also evaluations that the pre-sale of the 3rd phase new towns starting in July should be used to actively manage buying sentiment. Senior researcher Kim said, "We need to consider ways to minimize the departure of people waiting to secure housing," adding, "It is necessary to improve the subscription system (to favor them) during the government's 3rd phase new towns or metropolitan area supply process."