Surge in Inquiries Over Loan Easing for 'Under 900 Million'... Apartments on Seoul Outskirts 'Buzzing'

Buying demand shifts to mid-low priced outskirts
Rapid increase in demand due to 60% LTV expansion for non-homeowners
Expansion of record-high purchases for 600M-900M won apartments

[Asia Economy Reporter Kim Hyemin] As the loan threshold for actual homebuyers without housing decreases, mid-priced apartments on the outskirts of Seoul are stirring. Amid increased purchase inquiries and strong housing prices, record-high prices continue to be reported.

According to the Ministry of Land, Infrastructure and Transport's real transaction price disclosure system on the 27th, a clear trend of record-high purchases was observed mainly in apartments priced between 600 million and 900 million KRW in areas such as Guro, Gangbuk, Jungnang, and Gwanak districts since the beginning of this month. In Guro-gu, 19 out of 26 reported transactions this month recorded new highs. In Gangbuk-gu, 13 out of 27 transactions were record highs, and in Gwanak-gu, 8 out of 15 transactions reached record prices. Although there were only 6 transactions in Geumcheon-gu, 4 of them were record-high deals. While the number of listings has decreased, the buying sentiment is strengthening.

This appears to be because the buying sentiment of homebuyers without housing who want to secure their own home as soon as possible remains strong. In particular, frontline real estate agencies explain that the number of people actively seeking to buy has increased since the government eased loan regulations for actual buyers starting this month.

From this month, the government expanded the loan-to-value ratio (LTV) for mortgage loans for homebuyers without housing who meet certain income requirements from the previous 50% to 60%. The target housing criteria were also relaxed from 600 million KRW or less to 900 million KRW or less in speculative overheated districts. Although the maximum loan limit is capped at 400 million KRW, this effectively increases the loan limit by more than 100 million KRW for apartments priced between 600 million and 700 million KRW.

As demand increases, prices are also rising sharply. According to a survey by KB Kookmin Bank, the average apartment sale price per square meter in Guro-gu exceeded 10 million KRW for the first time this month. In the Gangbuk area, where mid-priced apartments are concentrated, the sale price of small to medium-sized apartments measuring 60 to 85㎡ (exclusive area) reached 892.57 million KRW, approaching the 900 million KRW mark.

In actual transactions, an 85㎡ unit in Yeongpung Madreville, Oryu-dong, Guro-gu was sold for 795 million KRW, up about 40 million KRW in one month. A 68㎡ unit in Hanshin Hanjin, Donam-dong, Seongbuk-gu was also sold for 755 million KRW this month, rising 77 million KRW compared to May. In Imun-dong, Dongdaemun-gu, all four transactions recorded new highs, and in Hong Eun-dong, Seodaemun-gu, 6 out of 7 transactions were record-high deals.

The head of A Real Estate Agency in Gangbuk-gu said, "Since the beginning of this month, listings have sharply decreased, and some buyers are willing to pay 50 million KRW more for royal units or specific floors," adding, "Inquiries continue, especially from the younger generation and newlyweds."