Seoul Apartment Transactions Shrink Again... Jeonse and Monthly Rentals Also Decline

After Strengthening of Land Transaction Permit Zones,
Sharp Decline in Apartment Transactions in the Three Gangnam Districts

Following the expansion and re-designation of land transaction permit zones, the Seoul apartment market has frozen once again. The real estate downturn, combined with uncertainties related to the presidential election, has led to declines not only in sales but also in both jeonse and monthly rental transactions.

Yonhap News

According to the Seoul Real Estate Information Plaza on May 5, the total number of apartment transactions in Seoul last month was 3,191, a decrease of 67.0% compared to the previous month. This also represents a 31.3% drop compared to the same month last year.

In the three Gangnam districts, where transactions surged and record-high prices were reported in February and March of this year, the number of transactions sharply decreased from March to April. Songpa saw 63 transactions, Gangnam had 37, and Seocho recorded 11, compared to 865, 802, and 410 respectively in the previous period.

The market expects that, due to the strengthened land transaction permit zones, the number of transactions in April will remain in the 3,000 range or will not exceed the 5,000 range.

Previously, the number of apartment transactions in Seoul stayed in the 3,000 range from September last year to January this year. In February and March of this year, the temporary lifting of the land transaction permit zone in the Gangnam area led to 6,462 transactions in February and 9,675 in March, representing increases of 88.1% and 47.7% compared to the previous month, respectively.

Last month, as the market cooled, both sales and jeonse and monthly rental transactions declined. The number of apartment jeonse transactions in Seoul last month was 9,011, a decrease of 32.8% from the previous month. Monthly rental transactions totaled 6,324, down 23.1%.

The market predicts that even after the presidential election, the downward trend in transactions will likely continue, depending on factors such as housing loan regulations and interest rate conditions.