7 Districts with Over 10% Decrease in Listings in One Month
'Panic Buying' Proves to Be 'Smart Buying' Amid Rising House Prices
Jeonse Instability Likely to Prolong Listing Shortage in Second Half
A price list in front of a real estate agency in Banpo-dong, Seocho-gu, Seoul. [Image source=Yonhap News]
[Asia Economy Reporter Onyu Lim] The barrier of 40,000 listings for Seoul apartments is on the verge of collapse. As soaring apartment prices have proven last year's 'panic buying' to be 'smart buying,' buyer sentiment is stirring, leading to a sharp decrease in listings. Although the government has issued warnings about a 'peak' and attempted to control the situation, forecasts suggest that the upward trend in housing prices will continue due to rental insecurity and eased loan regulations.
According to Apartment Real Transaction Price, a real estate big data company, the current number of apartment sale listings in Seoul stands at 40,155. This is an 8.7% decrease compared to 43,955 listings a month ago and an 11.3% decrease compared to 45,233 listings two months ago. If this trend continues, it is only a matter of time before Seoul apartment listings fall to the 30,000 range. Since February, Seoul apartment listings have consistently remained in the 40,000 range.
By region, Gangseo-gu showed the most significant decrease over the past month, dropping 18.1% from 2,076 to 1,701 listings. Following were ▲Gangbuk-gu (741 to 632) ▲Yongsan-gu (832 to 726) ▲Gwanak-gu (1,272 to 1,115) ▲Seocho-gu (3,841 to 3,373) ▲Songpa-gu (3,411 to 3,006) ▲Eunpyeong-gu (1,829 to 1,640), all recording decreases of over 10%.
The reason Seoul apartment listings have bottomed out is that, due to consecutive price increases, there are now more buyers than sellers. According to the Korea Real Estate Board, the apartment sale supply-demand index in Seoul for the third week of July was 107.7, up 2.6 points from 105.1 the previous week. This marks a rebound in the supply-demand index after five consecutive weeks of decline since the first week of last month.
After the announcement of the 2·4 measures, Seoul housing prices, which had stalled, continued to rise centered on reconstruction and mid-to-low price complexes, leading the market to evaluate last year's panic buying as justified. Despite government warnings about a housing price peak, the enthusiasm for homeownership is intensifying.
In particular, the expansion of loan limits for non-homeowners has fueled this enthusiasm. From the 1st of this month, the government increased the preferential mortgage loan benefit rate from the previous 10 percentage points to 20 percentage points and relaxed the eligibility from a combined couple income of 80 million KRW or less to 90 million KRW or less. As a result, buying demand is concentrating on apartments priced below 900 million KRW, which benefit from the policy change.
Consequently, housing prices in Seoul's outskirts, where mid-to-low price complexes are concentrated, are rising sharply. In the fourth week of July, apartment sale price growth in Nowon-gu was 0.35%, maintaining the highest rate in Seoul for 16 consecutive weeks. Dobong-gu also recorded a high growth rate of 0.26%.
Experts expect that, with slow supply of new apartments in Seoul and ongoing rental difficulties due to the new Lease Protection Act, buying demand will continue in the second half of the year, and housing prices will rise. Ham Young-jin, head of the Zigbang Big Data Lab, said, "The phenomenon of rental prices pushing up sale prices is likely to continue," adding, "Ahead of next year's presidential election, real estate pledges by presidential candidates could also stimulate housing prices."
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