"Seoul Apartment Listings Disappear"... 'Regulation Signals' Push Supply to Two-Year Low [Real Estate AtoZ]

71,723 Listings in Seoul, Down 9.6% in a Month
Lowest Level Since October 2023
Listings in Seongdong and Gwangjin Drop Over 20% in a Month
"Harder to Move Up" - Homeowners Respond Preemptively to Regulatory Signals
Market Enters a Wait

Following news that the government will soon announce a "real estate package policy," the number of apartments for sale in Seoul has plummeted to its lowest level in two years. Listings are rapidly disappearing, especially in the so-called "Hangang Belt" areas such as Mapo-gu, Seongdong-gu, and Gwangjin-gu, where new regulations are considered likely. With uncertainty over when these regulations might be implemented and the fact that real estate transactions typically take at least two months to complete, analysts say the market has entered a wait-and-see phase. As the number of listings declines, transactions are also expected to decrease, making it unlikely that home prices will fall in the short term.

Seoul viewed from Namsan. Yonhap News.

According to the real estate platform "Asil" on October 13, the number of apartments for sale in Seoul stood at 71,723. This represents a 9.6% decrease from 79,276 a month ago. It is the lowest figure since October 2023, when there were 70,690 listings. Before the June 27 lending restrictions, the number of listings in Seoul was in the 76,000 range, and after the September 7 supply measures, it temporarily exceeded 79,000. However, this month, the figure has dropped sharply, falling to the low 70,000s.

Over the past month, Seongdong-gu saw the largest decrease in listings, down 22.9% (from 1,934 to 1,493). Gwangjin-gu (-21.0%), Dongjak-gu (-17.3%), Yangcheon-gu (-15.7%), Mapo-gu (-14.9%), Yeongdeungpo-gu (-14.3%), and Gangdong-gu (-14.2%) also experienced sharp declines. All of these areas surpassed previous price peaks during the Moon Jae-in administration and are considered key regions where new regulations are being discussed. In addition, Dongdaemun-gu (-19.2%), Songpa-gu (-14.8%), and Gangseo-gu (-12.7%) have also seen a marked decrease in listings.

Market participants agree that the possibility of "tighter regulations" has caused potential sellers to withdraw from the market. A real estate agent in Seongdong-gu said, "Rumors are circulating that the government is considering designating adjustment target areas, speculative zones, or strengthening lending regulations, and this is prompting owners to pull their listings. There is growing anxiety that, if new regulations are introduced, a transaction freeze could occur, making it difficult to move up the property ladder."

Park Wongap, Chief Real Estate Expert at KB Kookmin Bank, explained, "People who own a single home are aware that, even if they sell now, after the regulations are implemented, it will be difficult to immediately purchase their desired property due to blocked transactions. This anxiety about a transaction freeze has led to a preemptive withdrawal of listings." He added, "As expectations for a drop in transaction volume spread, the fear of 'having nowhere to go even if I sell' is keeping sellers on the sidelines."

Some analysts point out that this trend is similar to what happened in December 2019, during the Moon Jae-in administration's 12·16 measures (which banned loans for apartments over 1.5 billion won in speculative and overheated districts). At that time, listings dried up and transactions plummeted. However, expectations of interest rate cuts and concerns about supply shortages due to the implementation of price caps on new apartments prevented home prices from falling. Subsequently, prices first rose in less-preferred areas that were less affected by lending restrictions, and this upward trend later spread to the most desirable neighborhoods. A similar macroeconomic environment is unfolding now, with expectations of interest rate cuts in the United States, falling domestic mortgage rates, and mounting concerns about a housing supply shortage in Seoul all coming to the fore.

The only difference is that the Debt Service Ratio (DSR) system has been introduced and gap investment (buying with tenants' deposits) has been restricted through the implementation of land transaction permit zones. Nam Hyukwoo, a real estate researcher at Woori Bank's WM Business Strategy Department, predicted, "In the most desirable areas, it will be difficult to see a surge in transaction volume and prices after government regulations, but with so few listings on the market, price declines are also likely to be limited."