March transaction volume 2,626 cases... Over 2,000 cases for two consecutive months
1st and 3rd measures, loan interest rate reduction effect... Recovery of buying sentiment
However, variables such as global financial instability and economic recession remain
The transaction freeze that had been blocking the Seoul real estate market is beginning to break down. Thanks to regulatory easing following the 1·3 measures and the base interest rate freeze, the volume of apartment transactions in Seoul has reached its highest level in 18 months, surpassing 2,000 cases for two consecutive months. Although the downward trend in housing prices continues, it appears that the government's goal of a soft landing for the real estate market will be achieved.
According to the Seoul Real Estate Information Plaza on the 16th, the total number of apartment sales transactions in Seoul in March was 2,626. This is the largest volume in 18 months since September 2021 (2,694 cases). As a result, the volume of apartment transactions in Seoul recorded over 2,000 cases for two consecutive months, following February (2,461 cases).
Of course, the March statistics include the ownership transfer of 250 units of Hoban Verdiumn Stay One, a station-area youth housing project in Daejo-dong, Eunpyeong-gu, managed by Seoul Housing & Communities Corporation (SH), but even excluding this, the transaction volume far exceeds 2,000 cases.
The Seoul real estate market sharply froze in the second half of last year due to the impact of US-origin interest rate hikes, suffering from a severe transaction freeze. Monthly transaction volumes hovered around 1,000 cases for six months: ▲July 647 ▲August 715 ▲September 608 ▲October 558 ▲November 730 ▲December 835. Even those urgently needing to move due to reasons such as pre-sale found it impossible to sell their homes, heightening fears of a hard landing in the real estate market.
In response, the government began to change the atmosphere by lifting regulatory restrictions on all areas except Gangnam, Seocho, Songpa, and Yongsan districts in Seoul through the 1·3 measures and easing punitive taxes and loan regulations targeting multi-homeowners. As a result, transactions mainly involving high-quality urgent sales followed one after another, breaking down the transaction freeze.
Recently, the Bank of Korea froze the base interest rate twice, lowering the floor of mortgage loan interest rates to the 3% range. With reduced loan burdens, expectations are growing that buying sentiment may recover going forward.
In fact, some autonomous districts have escaped the downward trend in housing prices. According to the Korea Real Estate Board, apartment prices in Songpa-gu rose by 0.02% in the second week of April. Apartment prices in Dongjak-gu also increased by 0.01%. In Dongjak-gu, this marked a rise for the first time in about 10 months since the first week of June last year. The Korea Real Estate Board explained, "Despite cautious buying sentiment, intermittent demand is occurring mainly for mid-priced and small-sized apartments near stations," adding, "In Dongjak-gu, amid mixed trends, prices rose mainly for small units in Sangdo-dong and Noryangjin-dong."
Experts say that as transaction volumes gradually recover, the possibility of a soft landing is increasing, but considering global financial instability and economic recession, the price decline is expected to continue for the time being. Kyunghee Yeo, Senior Researcher at Real Estate R114, said, "Following regulatory easing and a sharp drop in official property prices, movements by homeowners to withdraw listings or raise asking prices are also being detected," but she added, "Macroeconomic factors such as economic recessions and financial market instability in the US and Korea act as factors suppressing buying sentiment, so the market is expected to continue showing mixed trends."
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