Only 38 Cases from January to May This Year... Seoul Pre-sale Rights Also Face Transaction Drought

Apartment Sales Volume Followed by Pre-sale Rights Transactions at Lowest Levels

[Asia Economy Reporter Kim Hyemin] As the volume of apartment sales transactions in Seoul has hit the lowest level this year, it has been revealed that the trading of pre-sale rights and move-in rights is also in a drought state.

According to the Seoul Real Estate Information Plaza on the 4th, the number of pre-sale rights and move-in rights transactions from January to May this year was recorded at 38 cases. This is about 28% of the 132 cases during the same period last year. Until last year, an average of about 20 cases were traded monthly, but this year, the numbers remained in single digits with 8 cases in January and 7 cases in February. Although June's figures are not finalized due to the 30-day real estate transaction reporting deadline, the current count stands at only 3 cases.

This transaction cliff is the result of the contraction of the Seoul apartment sales market, which also affected the pre-sale rights market. According to the Korea Real Estate Board, the number of apartment sales in Seoul from January to May this year was 7,917 cases, about one-third of the 25,159 cases during the same period last year. This is the first year that apartment sales in January to May have not exceeded 10,000 cases. The reduction in pre-sale or move-in supply in Seoul over the past one to two years also had an impact.

In particular, there is an analysis that the anti-speculation policies introduced by the previous government also shrank the pre-sale rights trading market in Seoul. In November 2016, the government prohibited the resale of pre-sale rights in the four Gangnam districts of Seoul and Gwacheon in Gyeonggi Province from 6 months to until the ownership transfer registration, and in June 2017, this measure was expanded to the entire Seoul area. Meanwhile, with increased regulations such as heavy taxation on pre-sale rights transactions and including pre-sale rights in the number of houses in regulated areas, the volume of pre-sale and move-in rights transactions in Seoul shrank from 1,309 cases in 2018 to 708 in 2019, 323 in 2020, and 132 in 2021.

Yeokyunghee, Senior Researcher at Real Estate R114, said, "With various regulations, contraction of the sales market, and the pre-sale and move-in cliff overlapping, the situation is unlikely to improve in the second half of the year."