Capital Region Apartment Prices Steady... Real Demand Unable to Buy Due to Loan Regulations Shifts to Jeonse Rentals

Seoul Sale Prices Up 0.02%, Jeonse Prices Up 0.01%
Week-on-Week Change Rate Shrinks

Loan Regulations and Chuseok Holiday Impact
Sellers and Buyers Taking a Breather

When crossing the Banpo Bridge in Seoul, you can see new apartments, old apartments, and apartments under construction all at once in the Sinbanpo area. The new apartments on the left are Acro Riverview Sinbanpo, the low old apartments on the right are Sinbanpo 2nd Complex, and the apartments under construction in the back are the Maple Xi construction site. Photo by Huh Younghan younghan@

New loan regulations, including Stress DSR (Debt Service Ratio) phase 2, have been introduced, and with the long Chuseok holiday overlapping, price movements this week have also contracted accordingly. Real Estate R114 reported on the 13th in its weekly market report for the second week of September in the metropolitan area that "Seoul, new towns, Gyeonggi, and Incheon all saw transaction and jeonse price change rates move within a firm range of 0.01% to 0.02%."

With Lee Bok-hyun, the Financial Supervisory Service Chairman, issuing an apology regarding loan regulations that had tightened even on genuine buyers, it seems that banks are beginning to actively distinguish genuine buyers. However, since the majority of the demand driving current metropolitan area transactions consists of non-homeowners aiming to purchase their first home or one-home owners, which is interpreted as genuine demand, it is expected to be difficult for loan regulations to induce an overall trend change in transaction prices.

Seoul apartment transaction prices rose by 0.02%, with the increase rate slowing by 0.01 percentage points compared to the previous week. General apartments increased by 0.01%, while redevelopment apartments jumped 0.04%. New towns and Gyeonggi·Incheon each rose by 0.01%. Among Seoul's 25 districts, none saw a decline, and prices rose in 9 districts.

Seongdong (0.09%), Gwangjin (0.09%), Gangnam (0.04%), Mapo (0.02%), Gwanak (0.02%), and Gangdong (0.02%) led the increases. In new towns, prices rose in Gwanggyo (0.07%), Sanbon (0.02%), Pyeongchon (0.02%), and Bundang (0.02%).

In Gyeonggi and Incheon, prices increased in Anyang (0.02%), Suwon (0.02%), and Goyang (0.02%), while outer areas such as Icheon (-0.03%), Pyeongtaek (-0.02%), and Uijeongbu (-0.01%) saw declines.

The metropolitan area jeonse market showed low growth rates below 0.01% in Seoul, new towns, and Gyeonggi·Incheon due to the overlapping effects of the autumn moving season and the Chuseok holiday. Since the holiday effect is expected to continue until the third week of September, the firm trend is anticipated to persist.

In Seoul’s individual areas, prices rose in Seongdong (0.09%), Jongno (0.07%), Gwangjin (0.06%), Yangcheon (0.05%), Gwanak (0.02%), Mapo (0.01%), and Nowon (0.01%). Most new towns remained flat (0.00%), with Gimpo Hangang rising by 0.01%.

In Gyeonggi·Incheon individual areas, prices increased in Suwon (0.07%), Guri (0.06%), Incheon (0.02%), Uijeongbu (0.01%), and Goyang (0.01%).

A Real Estate R114 official stated, "The full-scale autumn moving season will begin after Chuseok," adding, "Since apartment supply in the metropolitan area, especially around Gyeonggi Province, will decrease in September and October, the trend of rising jeonse and monthly rent prices in the Gyeonggi area is expected to strengthen."

They emphasized, "Due to the government's loan regulations, genuine buyers who could not move into the transaction market may join the rental market more than expected, so monitoring whether the suppressive effect on the transaction market is transferring to the rental market is necessary," and added, "As the government is expanding public new apartment purchases of non-apartment housing through the August 8 supply plan and is promoting various tax supports for private rental business operators, it is necessary to prepare in advance for demand inflow during the autumn moving season through rapid implementation of these systems."