Apartments as 'Gyeryuk' to Buy or Not... Real Buyers Face Growing Dilemma

Seoul Apartment Transactions Exceed 3,000 Units for Two Consecutive Months
However, Proportion of Record High Prices Decreases While Record Low Prices Increase

Real estate indicators are not showing a clear direction, causing actual buyers to struggle with timing their purchases. Looking at Seoul alone, apartment transaction volumes have recorded over 3,000 units for two consecutive months, showing signs of recovery. However, nationwide, recent declines in real estate sales have created a confusing market environment.

[Image source=Yonhap News]

On the 22nd, 'Real Estate Planet' analyzed the Ministry of Land, Infrastructure and Transport's actual transaction data and found that the total nationwide real estate sales volume, including apartments, in April was 91,669 transactions, down 8.4% from the previous month (100,030 transactions). This marks the first time since June last year that the March transaction volume exceeded 100,000 but then decreased again within a month. Compared to April last year’s 126,709 transactions, it decreased by 27.7%.

Focusing only on the Seoul area, the trend is upward. According to the Seoul Real Estate Information Plaza, as of the 22nd, the provisional apartment transaction volume for May was 3,206 units, exceeding 3,000 for two consecutive months following April. Considering that the reporting deadline has not yet passed, the final figure released at the end of this month is likely to surpass April’s 3,189 transactions.

However, although the transaction volume itself has increased, when looking at housing prices, the number of transactions at falling prices has increased rather than those at rising prices, leading some to believe it is premature to confidently claim a recovery based solely on transaction volume. Last month, nationwide apartment transactions at record-high prices were 1,152, down 3.54% from the previous month. Transactions at record-low prices were 580, up 1.78%. In particular, Seoul’s May apartment transactions at record-high prices were 198, down 66 from the previous month, and their share of total transactions slightly decreased to 7.64% compared to the previous month.

With indicators showing mixed trends, actual buyers’ concerns are deepening. Regarding this, Park Won-gap, Senior Real Estate Specialist at KB Kookmin Bank, said, "The apartment market right now is like a 'gyeruk (chicken rib)' for actual buyers," meaning "it’s neither good to buy nor good not to buy."

So, how should actual buyers act? Generally, experts advise determining the purchase timing by observing factors such as unsold inventory, apartment transaction volumes reaching historical averages, and rising jeonse (long-term lease) prices. However, if statistics do not fully reflect the market atmosphere, ultimately, prices must be considered. Park said, "You should judge whether the purchase price is cheaper compared to the market peak in October 2021, or if attempting to buy a new unit, it should be at least 10% cheaper than surrounding market prices."

There was also an opinion that actual transaction prices and whether transactions are at rising or falling prices should be examined rather than just transaction volume. Song Seung-hyun, CEO of City and Economy, advised, "What matters more than psychological factors like supply-demand indices is the actual transaction price. You should assess recent trends in your desired purchase area and whether falling-price transactions dominate or rising-price transactions prevail before making a decision."