"Tired of the Rollercoaster Market"... First-Time Homebuyers Reach a 2-Year and 4-Month High

30,669 First-Time Homebuyers in April
Four Consecutive Months of Increase This Year
"Absolute Lack of Purchase Volume... Market Recovery Premature," Analysis Says

The number of people without homes who are trying to buy their own houses has been increasing. Amid growing concerns about the rental market due to the reverse jeonse crisis and the spread of jeonse fraud, it is interpreted that non-homeowners have actively started purchasing as the government eased loan regulations.

[Image source=Yonhap News]

According to the Court Registry Information Plaza on the 1st, the number of first-time real estate buyers for collective buildings (officetels, apartments, row houses, multi-family houses, etc.) in April was recorded at 30,669. This is the highest figure in 2 years and 4 months since December 2021 (35,552). This number had not exceeded 30,000 continuously since January last year (30,521), but steadily increased for four consecutive months this year: 17,269 in January, 20,720 in February, and 30,126 in March, rising back into the 30,000 range. Compared to the same period last year (27,269), it increased by 12.47%.

The analysis suggests that the demand for 'owning a home' has grown due to the increasing issues of reverse jeonse crisis and jeonse fraud, and that home purchases have become easier due to the government's deregulation. In August last year, the government raised the LTV cap to a uniform 80% regardless of housing price and region for first-time homebuyers, and expanded the loan limit from 400 million KRW to 600 million KRW. Furthermore, at the end of January, the government launched the Special Bogeumjari Loan, a product offering loans at lower interest rates than the market for homes priced under 900 million KRW regardless of income, significantly lowering the threshold for first-time home purchases.

In particular, the buying trend among first-time homebuyers in their 20s and 30s stood out. In April, the number of non-homeowners in their 20s and 30s who purchased homes was 16,796, marking the highest point in 16 months since the end of 2021 (20,574). After recording 8,955 in January this year, the number has been rising for four consecutive months. The proportion of first-time home purchases by the 20s and 30s age group also increased from 51.86% in January to 55.27% in April.

As non-homeowners continue to buy, some observers suggest that the market sentiment has revived. However, there are also opinions that it is premature to assert that this trend will lead to a major upward movement. Kyunghee Yeo, Senior Researcher at Real Estate R114, said, "The number of first-time homebuyers using eased loan regulations and the Special Bogeumjari Loan increased at a time when house prices had declined. However, it is still insufficient in absolute purchase numbers to say that the market has recovered."