Atmosphere shifts after announcement of expanded land transaction permission zones
Resentz 84㎡ unit, which once reached 2.9 billion KRW, sold in the high 2.6 billion KRW range
"Prices rose by 200 to 300 million KRW, then dropped after expansion announcement"
Seoul City discovers 17 abnormal transactions after lifting of land transaction permission zone
After the Seoul Metropolitan Government expanded the designation of land transaction permission zones, urgent sale properties emerged even in the Jamsil Daejang complex, resulting in transactions at prices approximately 200 million to 300 million KRW lower than before.
Seoul conducted intensive inspections focusing on real estate in the designated land transaction permission zones from the 21st to the 23rd following the announcement of the lifting of restrictions. On the 21st, on-site inspections were carried out targeting real estate agencies around Els and Resentz in Jamsil-dong, Songpa-gu.
From the 24th until September 30th, the entire Gangnam, Seocho, Songpa districts, and Yongsan district are designated as land transaction permission zones, where sales are prohibited unless for actual residence in 2,200 complexes. For areas such as Jamsil, Samsung, Daechi, and Cheongdam-dong, which were lifted from the permission zone on the 13th of last month, gap investments are temporarily allowed if the transaction contract is signed by the 23rd.
Seoul City conducted intensive inspections over the weekend for three days (21st to 23rd) in the designated areas ahead of the enforcement of the expanded land transaction permit zones. Photo by Seoul City
"Prices dropped after announcement... urgent sales lowered by 250 million KRW sold"
In the Jamsil-dong area, homeowners lowered their asking prices just before the enforcement of the expanded land transaction permission zone designation, and transactions were mainly conducted through urgent sales. The atmosphere has changed significantly compared to a month ago after the lifting. Previously, the 84㎡ unit in Resentz, Jamsil, was sold for 2.9 billion KRW on the 27th of last month, and the same-sized unit in Els, Jamsil, was sold for 3.05 billion KRW on the 22nd of last month, setting record prices.
The representative of real estate agency A near Resentz said, "On the 19th, an 84㎡ unit in Elite was traded at 2.69 billion KRW under the condition that the buyer moves in, and a low-floor unit was sold as an urgent sale for gap investment at about 2.5 billion KRW lower, at 2.75 billion KRW. After the announcement of the expanded land transaction permission zone designation, the listing price dropped from 3.2 billion KRW to 2.9 billion KRW."
The representative of real estate agency B said, "The asking price for Elite dropped by about 200 million KRW from the 2.8 to 2.9 billion KRW range, but well-located units still sell for 3 billion KRW. Recently, there have been many calls and messages about urgent sales. We need to keep watching whether the lowered prices will stabilize."
As demand for gap investment purchases decreased, asking prices fell again, but due to the price gap, transactions remain limited. The representative of agency A explained, "Prices rose by about 200 to 300 million KRW and stayed that way for a month, but after the policy announcement, prices dropped. Sellers feel pressured to sell within 2 to 3 days. Previously, out of 50 units, 10 were for actual residence and 40 were gap investment cases, but now all have disappeared, changing the atmosphere."
Although there were many inquiries about sales and purchases considering transactions just before enforcement, actual transactions are not frequent. The representative of agency A explained, "There have been several calls asking how much a unit with a tenant under a lease would sell for if put on the market now, and buyers are only making inquiry calls."
Real estate agencies also pointed out that before the announcement of the expanded land transaction permission zone designation, information about the highest transaction prices was shared on real estate cafes and other communities, fueling price increases.
The representative of agency B said, "When the highest price posts were uploaded on real estate cafes, many inquiries came based on unverified information. The cafes became a driving force for raising house prices. When unknown people wrote in a single comment that Resentz sold for a certain price, that opinion gained traction," he lamented.
The representative of agency B added, "People believed those words and houses were listed at those prices, causing us brokers to be criticized. When the average house price was around 2.7 to 2.8 billion KRW, someone listed a unit for 3.2 billion KRW, and it actually sold at that price. It matched perfectly," he added.
Seoul City conducts intensive inspections on price collusion and false reporting to inflate prices
The city promoted inspections to preemptively block market disruption activities amid signs of overheating transactions. The inspections focused on detecting price collusion, false transaction contract reports aimed at inflating prices, and false listings.
As a result of inspecting 136 real estate offices that concluded transaction contracts by the 22nd after the lifting of the land transaction permission zone, 17 suspicious transactions were discovered. The city plans to investigate whether the reported transaction details match the actual transaction records by questioning the parties involved.
For real estate offices that were not operating during the inspection and could not be surveyed on-site, the city plans to revisit or request submission of explanatory materials to conduct a full investigation of suspicious transactions.
The city will also continuously monitor transaction trends in areas where speculative demand inflow is a concern. With the expansion of the land transaction permission zone expected to reduce the supply of properties for sale and cause price increases, the city aims to detect abnormal market trends early and consider additional measures if necessary.
Jo Nam-jun, head of the Urban Space Headquarters of Seoul City, said, "With the full effect of the system about to take place, market disruption activities such as abnormal transactions are a serious concern. We will do our best to protect actual demand buyers first and foremost and establish a transparent market transaction order."
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