Adjustment Phase After Loan Restrictions
Jeonse Prices Rise in Most Regions Nationwide
As the sixth week since the implementation of the 6.27 loan regulations begins, the upward trend in Seoul apartment prices has slowed. Analysts attribute this adjustment phase in housing prices to a decrease in purchasing demand caused by the effects of the stringent loan restrictions.
According to Real Estate R114 on August 10, nationwide apartment sale prices in the second week of August rose by 0.11% compared to the previous week. In Seoul, prices increased by 0.15%, but the rate of increase slowed from the previous week. While Seoul’s housing prices had shown a declining rate of increase for three consecutive weeks since the second week of July, there was a rebound in the first week of this month. However, in the second week, the rate of increase slowed again, resulting in a period of repeated minor rises and falls.
In the Seoul metropolitan area, prices rose by 0.12%, with Gyeonggi and Incheon both increasing by 0.09%, driving the overall upward trend. The five major metropolitan cities and other regions rose by 0.11% and 0.05%, respectively. Among the 17 provinces and metropolitan cities nationwide, all regions except Jeju (-0.03%) and Sejong (-0.03%) saw increases. By region, the order of increase was Gwangju (0.17%), Daegu (0.15%), Seoul (0.15%), Jeonnam (0.11%), Busan (0.11%), and Chungnam (0.10%).
Jeonse (long-term lease) prices also showed an upward trend in most regions nationwide, including Seoul. By region, Seoul rose by 0.03%, the metropolitan area by 0.05%, Gyeonggi and Incheon by 0.07%, the five major metropolitan cities by 0.04%, and other regions by 0.04%. There were no regions with declines, with one region remaining flat and 16 regions experiencing increases, indicating a strong nationwide upward trend.
It is interpreted that the rise in jeonse prices is being influenced by financial institutions raising the threshold for loans, such as expanding conditional jeonse loans, previously limited to Seoul, to other regions as well. A representative from Real Estate R114 stated, "Since the 6.27 measures, banks have been tightening regulations on jeonse loans," adding, "As banks strengthen their loan screening, it is expected that the burden of securing funds will increase for actual demand groups who are finding it more difficult to obtain jeonse loans."
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