"Last Train Panic Buying" Was Real...Share of Seoul Apartment Purchases by People in Their 30s Hits 4-Year High [Real Estate A to Z]

30s Account for 36.7% of Purchases in September, Highest Since September 2021
Over 40% of Buyers in Their 30s in Seongdong, Gangseo, and Gwanak
Gangnam 3 Districts, Yangcheon, and Gwangjin See 40s Take the Lead: "Gap in Capital Strength"
Experts:

In September, the proportion of apartment purchases in Seoul made by people in their 30s reached its highest level since 2021, when the "Yeongkkeul" (a term referring to taking out loans to the limit) buying frenzy peaked. Analysts attribute this surge to disappointment with the September 7 supply measures and the imminent signals of new regulations, which prompted a large number of people in their 30s to buy homes. However, with the tightening of loan regulations following the October 15 real estate measures, experts predict that this trend will likely subside for the time being.

Seongdong-gu, highly preferred by people in their 30s. Photo shows Centras in Wangsimni. The Asia Business Daily.

According to the "September Apartment Purchase Statistics by Age Group," recently released by the Korea Real Estate Board on November 5, there were a total of 6,796 apartment transactions in Seoul. Of these, people in their 30s accounted for the highest share at 36.7% (2,493 transactions). This was followed by those in their 40s (27.4%), 50s (16.2%), 60s (9.0%), those aged 70 and above (5.7%), and those in their 20s or younger (2.8%).

Notably, the purchase share of people in their 30s, which had dropped to a yearly low of 31.4% the previous month, jumped by 5.3 percentage points in just one month. This is the highest figure in four years. The 36.7% share for people in their 30s is the highest since September 2021 (38.8%). The all-time high was 39.5% in January 2021, at the peak of the "Yeongkkeul" phenomenon during the Moon Jae-in administration.

Ham Youngjin, Head of Real Estate Research Lab at Woori Bank, explained, "September was a period when rumors of impending regulations were spreading, heightening anxiety about missing out on buying opportunities," adding, "This created a kind of 'last train' mentality, which was especially pronounced among people in their 30s."

The buying trend among people in their 30s was evident across all of Seoul. In 19 out of the city's 25 districts, people in their 30s accounted for the highest share of apartment purchases among all age groups. In particular, in Gangseo-gu, 201 out of 419 transactions (48.0%) were made by people in their 30s-meaning that one out of every two buyers was in their 30s. Other districts with high proportions of buyers in their 30s included Gwanak-gu (46.1%), Seongdong-gu (45.5%), Eunpyeong-gu (43.0%), and Yeongdeungpo-gu (42.8%).

In contrast, in six districts-including the three Gangnam districts, Yangcheon-gu, Gwangjin-gu, and Gangdong-gu-people in their 40s outpaced those in their 30s in terms of purchase share. These six districts are among the top ten in Seoul for average apartment prices. In Seocho-gu, people in their 40s accounted for 35.5% of purchases compared to 25.0% for those in their 30s, a gap of about 10%. In Gangnam-gu, the figures were 34.0% for those in their 40s and 24.2% for those in their 30s. In Songpa-gu, people in their 40s (30.7%) narrowly surpassed those in their 30s (30.0%) to take the top spot.

Park Wongap, Senior Real Estate Expert at KB Kookmin Bank, analyzed, "There is a growing trend of people in their 30s, who find it difficult to enter the Gangnam market, choosing areas like Seongdong-gu and Mapo-gu as alternatives, as these districts offer a wider price spectrum and proximity to workplaces." He added, "This is deepening the regional segmentation of the real estate market." In Seongdong-gu, people in their 30s accounted for 45.5% of purchases, far outpacing those in their 40s (29.2%). In Mapo-gu, the gap between people in their 30s (38.7%) and 40s (28.8%) was also significant. It can be said that people in their 30s have played a major role in the recent surge of Seongdong-gu and Mapo-gu, which have led the "Hangang Belt" boom.

The September surge in purchases by people in their 30s reflects an extreme buying sentiment right before new regulations took effect. However, with the implementation of stricter loan regulations across Seoul following the October 15 real estate measures, the general consensus is that the buying power of people in their 30s-who typically have less capital-will shrink rapidly compared to those in their 40s and 50s. Park noted, "The uniform application of a 40% loan-to-value (LTV) ratio will be the biggest barrier for people in their 30s, who lack capital," adding, "It appears that the aggressive buying trend among people in their 30s has peaked, and it is highly likely to subside for the time being."