Government: "Seoul Housing Price Increase Slows... Will Use Regulation Cards Like Toheoje If Prices Fluctuate Again"

Gangnam 3 Districts and Yongsan See a Slowdown
Crackdown on Housing Price Manipulation Intensifies
Thorough Inspection of Housing Supply Continues

The government diagnosed that the rise in housing prices in major areas has somewhat slowed down following the re-designation of the land transaction permission zones in Seoul's Gangnam 3 districts (Gangnam, Seocho, Songpa) and Yongsan district, but also warned that regulatory measures will be taken if necessary.

On the 11th, the government held the '15th Real Estate Market and Supply Situation Inspection TF' chaired by Kim Beom-seok, First Vice Minister of the Ministry of Economy and Finance, and Jin Hyun-hwan, First Vice Minister of the Ministry of Land, Infrastructure and Transport, to review recent market trends together with related agencies such as the Seoul Metropolitan Government, Financial Services Commission, Bank of Korea, and Financial Supervisory Service.

Residential complexes such as apartments in Seoul city. Photo by Yonhap News

The attendees evaluated that since the announcement of the 'Housing Market Stabilization Plan' in March, the rate of increase in apartment prices in Seoul areas including Yongsan and the Gangnam 3 districts has become moderate. At that time, the government designated all apartments in Seoul's Gangnam 3 districts and Yongsan district as land transaction permission zones from the 24th of this month until the end of September.

The weekly apartment price change rate in Seoul decreased from 0.25% in the third week of March to 0.08% in the first week of April. In the Gangnam 3 districts and Yongsan, the increase rate also dropped from 0.74% to 0.16% during the same period.

The government stated, "If concerns about housing market instability arise again in the future, we will consider various countermeasures including additional designation of adjusted areas, speculative overheating districts, and land transaction permission zones, as well as financial, tax, and policy loan measures to stabilize the market."

◆ "Timely Supply of Move-in Volume"... Managing 14,000 Households in Southeast Seoul = The government also emphasized the smooth supply of scheduled move-in volumes in Seoul and the metropolitan area.

The Seoul Metropolitan Government announced that it will regularly inspect the overall status of redevelopment projects, including 14,000 households scheduled to move in this year in the southeast area (Gangnam, Seocho, Songpa, Gangdong), and will deploy coordinators to prevent project delays in case of conflicts.

The supply of newly built purchase agreement volumes to expand supply in the metropolitan area will also be in full swing. The government secured 110,000 units last year through this method, with about 80% concentrated in preferred areas such as metropolitan subway station zones. Move-ins are scheduled to begin sequentially from next year.

The newly built purchase agreement is a method where the private sector builds houses, and the Korea Land and Housing Corporation (LH) purchases them to convert into rental or sale units.

Kim Beom-seok, Vice Minister of Strategy and Finance, is presiding over the "15th Real Estate Market and Supply Situation Inspection Task Force Meeting" held on the 11th at the Government Seoul Office in Jongno-gu, Seoul. Photo by Ministry of Strategy and Finance

◆ Crackdown on Price Manipulation and False Listings... Strengthening Household Loan Management by Region = The government and Seoul Metropolitan Government have formed a joint inspection team with the Korea Real Estate Board to intensively crack down on market-disturbing activities such as price collusion, false listings, and illicit gifts or loans, focusing on popular areas in Seoul.

Recently, signs of price collusion through Seoul apartment community applications were detected, and additional investigations have been requested from local governments.

Price manipulation such as contract cancellations after record-high transactions, illicit gifts, and illicit loans will be reported to the National Tax Service, Financial Services Commission, Ministry of the Interior and Safety, local governments, and police for strict response.

The financial authorities decided to strengthen regional monitoring centered on Seoul and the metropolitan area in addition to existing monthly and quarterly household loan management. While maintaining a fund supply policy focused on actual demand, they stated they will cooperate with the financial sector to manage household debt risks and prevent their spread in case of rapid price surges.

The government said, "We will continue to closely monitor market conditions through the real estate TF and respond swiftly as a 'one team' with related ministries and local governments when necessary."