First-Time Buyers of Multi-Unit Buildings Reach 36,838
More Than Double Compared to One Year Ago When Housing Prices Plummeted
Increase May Slow Due to Prolonged High Interest Rates and Other Factors
As the real estate market revives, the number of people who purchased their first home in October was the highest so far this year. This figure is more than double compared to a year ago when housing prices were plummeting.
According to the 'Ownership Transfer Registration (Sale) Applicant Status' from the Court Registry Information Plaza on the 6th, the number of first-time buyers of collective housing in October was 36,838. This is an increase of 5,819 people (18.8%) compared to 31,019 in the previous month, marking the highest number this year. Compared to a year ago (17,087 people), it more than doubled.
Collective housing refers to apartments, row houses, multi-family houses, officetels, etc., where structurally separated parts within a single building can be independently used and are subject to separate ownership rights.
The number of first-time buyers of collective housing reached 540,506 in 2020 and 513,208 in 2021 when housing prices were rising, but due to the impact of high interest rates and a sharp drop in housing prices last year, it fell to 301,542. This was about 25,129 per month on average.
However, as the real estate market revived following various government deregulations earlier this year, more people felt they "could no longer postpone buying their own home." According to the Korea Real Estate Board, the actual transaction price index for Seoul apartments rose by about 12.4% cumulatively from January to August this year, recovering more than half of last year's decline (-22.2%). Additionally, with the government launching special Bogeumjari loans and easing the loan-to-value ratio (LTV) for first-time homebuyers, more than 30,000 people purchased collective housing for the first time in every month except January, February, and May. The soaring apartment pre-sale prices due to increased construction costs and growing concerns over housing supply shortages in Seoul also influenced this trend.
However, recently, as the government tightens loans due to household debt issues and concerns over prolonged high interest rates grow, the number of first-time buyers may decrease again. The general type of special Bogeumjari loans has already been suspended since the end of September. Kyunghee Yeo, Senior Researcher at Real Estate R114, explained, "The rise in market interest rates, reduction in loans, and economic uncertainties have fueled a wait-and-see attitude, significantly dampening buyer sentiment."
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