"Newborn Special Loan Effect"... Last Month, 3040 Apartment Purchase Share Soars

3,482 Apartment Sales in Seoul Last Month... 31% Increase in One Month
Nowon, Dobong, Guro Districts See Growth; Over Half of Buyers in Their 30s and 40s

Last month, the volume of apartment sales transactions in Seoul increased by more than 30% in just one month. Among them, people in their 30s and 40s led the increase in transaction volume. Experts analyze this as the effect of the Newborn Special Loan launched on January 29.

Seoul Apartment Sales Rise Over 30%, "Impact of Newborn Special Loan"

According to the housing transaction status announced by the Korea Real Estate Board on the 2nd, the volume of apartment sales transactions in Seoul last month was 3,482 cases, a 31% (817 cases) increase compared to the previous month (2,665 cases). Compared to the 9% (209 cases) increase in February, the transaction volume rose sharply. The volume of apartment sales transactions in Seoul, which was 1,790 cases in December last year, increased for three consecutive months with 2,456 cases in January and 2,665 cases in February. This is the highest level in six months since September last year (3,845 cases).

People in their 30s and 40s drove the upward trend in transaction volume. The age group with the largest increase in transaction volume between February and last month was those in their 30s. During this period, the number increased by 267 cases from 875 to 1,142. Those in their 40s followed with an increase of 216 cases (842 → 1,058). The combined increase of people in their 30s and 40s accounted for 60% of the total increase (817 cases). Next, people in their 50s and 60s increased by 158 and 98 cases respectively, while those aged 70 and above increased by 70 cases, and those in their 20s increased by 23 cases.

Experts judged that this was the result of the purchase sentiment of young real demand buyers being revived thanks to the implementation of the Newborn Special Loan. Yoon Soo-min, a real estate specialist at NH Nonghyup Bank, explained, "With the loan interest rate cut in the first quarter of this year and the implementation of the Newborn Special Loan from January 29, it seems to have influenced the increase in transaction volume in February and March this year," adding, "Apartment purchase movements appeared mainly among newlywed couples in their 30s."

The Newborn Special Loan is a policy financial product that provides low-interest loans at an annual rate of 1.6% to 3.3% for housing purchase funds or jeonse (long-term deposit lease) funds to households without housing who have given birth within two years (based on the loan reference date). Eligible households are those with a combined annual income of 130 million KRW or less and net assets of 469 million KRW or less.

Increase in Purchases by 30s and 40s in Nowon and Dobong Districts with Many Apartments Under 900 Million KRW

In particular, since loans can be obtained when purchasing houses priced under 900 million KRW, transaction trends in areas where housing can be bought below 900 million KRW, such as ‘Nodogang’ (Nowon, Dobong, Gangbuk Districts) and ‘Geumgwan-gu’ (Geumcheon, Gwanak, Guro Districts), attracted attention. According to Real Estate R114, the district with the most houses under 900 million KRW eligible for the Newborn Special Loan was Nowon District (95,130 households), followed by Dobong District (50,537 households), Guro District (41,378 households), Seongbuk District (35,417 households), Gangseo District (29,460 households), Jungnang District (27,335 households), and Gwanak District (22,464 households).

Looking at the transaction volume increase trends in these districts, Nowon District recorded an increase of 61 cases between February and March this year, ranking second among Seoul’s 25 districts (first was Songpa District with 76 cases). Among these, the increase in people in their 30s and 40s was 32 cases, accounting for 52% of the total increase in Nowon District. In Dobong District, the increase during the same period was 50 cases, with people in their 30s and 40s also accounting for half. In Guro District, which increased by 46 cases, the proportion of people in their 30s and 40s was high at 63%. Seongbuk District saw an increase of 21 cases, of which 19 were purchases by people in their 30s and 40s.

The head of S Real Estate Agency in Junggye-dong, Nowon District, said, "Recently, there have been many inquiries from young people about small-sized apartments around 18 pyeong (approximately 59.5 square meters) and affordable listings."