One Month After the 10·15 Measures: Transactions Plummet, Listings Dry Up, but Yongsan and Seocho Surge [Real Estate AtoZ]

Brief Slowdown After Regulations... Key Areas Stirring Again
Listings Disappear Amid Transaction Cliff
"No Drop in Asking Prices"
"Plateau Phenomenon Keeps Prices Steady... Jeonse Market Continues to Rise"

It has been a month since the government introduced the October 15 measures to curb the overheated housing prices in Seoul, but the market is moving in a direction different from what the government expected. Transaction volumes have plummeted, making the so-called "transaction cliff" a reality. However, in a paradoxical twist, housing prices in the Hangang Belt area-the main target of the regulations-have actually seen their rate of increase expand.

Hangang Belt: A 'Regulation-Free Zone'

Jamwon Hangang Apartment seen from Gangbuk. Photo by Hyoyoung Han

According to the nationwide weekly apartment price trends for the second week of November (as of November 10) released by the Korea Real Estate Board on the 13th, the average apartment sale price in Seoul rose by 0.17% compared to the previous week. The rate of increase slowed by 0.02 percentage points from the previous week’s 0.19%.

However, in the Hangang Belt-the main focus of the measures-the rate of increase actually expanded. In Yongsan District, the rate rose from 0.23% to 0.31%. Seocho District saw an increase from 0.16% to 0.20%. Songpa District went from 0.43% to 0.47%, while Seongdong District jumped from 0.29% to 0.37%.

Looking at the trends over the past month, these core areas experienced a brief slowdown immediately after the regulations, but began to rebound again in November.

In Yongsan District, the weekly increase rate appeared to slow from 0.63% to 0.29% and then to 0.23% immediately after the measures, but recently rebounded to 0.31%, maintaining strong upward momentum throughout the month. Songpa District also saw its rate fall from 0.93% to 0.43%, but then rise again to 0.47% in the second week of this month.

Seongdong District experienced a sharp 1.63% increase in the two weeks prior to the measures, then calmed to 0.37%, but it still maintains one of the highest growth rates in Seoul. Seocho District showed a trend of narrowing increases, from 0.45% to 0.22%, 0.18%, 0.16%, and then 0.20%, but remained in positive territory throughout the month.

In Gwacheon City, a regulated area in Gyeonggi Province, the rate of increase actually expanded from 1.16% to 1.48% immediately after the measures, only recently slowing to 0.40%. However, it still records a higher growth rate than most areas of Seoul.

Similarly, Bundang District in Seongnam City surged from 1.53% to 1.78% right after the measures, and although it has since fallen to 0.58%, it continues to maintain a high rate of around 0.5% even a month later.

15% of Listings Disappear: "No Need to Rush" as Homeowners Hold Out

Since the October 15 measures, both buyers and sellers have disappeared from the Seoul housing market. Tighter loan regulations have dampened buying demand, and the designation of land transaction permit zones-which require two years of actual residence-has blocked gap investments (buying with tenants in place), causing transactions to freeze. According to analysis by the real estate research firm RealToday, from October 16 (the implementation date of the measures) to November 11, transaction volume was 2,320 cases, a 77.4% decrease from the previous 27-day period (10,254 cases).

During this process, the number of listings on the market itself has decreased, resulting in asking prices not dropping. As listings became scarce, urgent sales were quickly snapped up, and the remaining properties did not lower their asking prices, leading to a paradoxical situation where prices are either maintained or even rise.

In fact, according to the real estate platform Asil, the number of apartment listings for sale in Seoul fell by 15% (11,151 units) in one month, from 74,044 on October 15 to 62,893 on November 13. Homeowners in prime locations who already own a "smart single property" have seen property values rise enough that there is no urgent need to cash out. Additionally, based on past experience, there is a strong expectation that "the value of areas like Yongsan and Gangnam will eventually rise again after regulations," which has contributed to this trend.

The Korea Real Estate Board explained, "With the overall market remaining in a wait-and-see mode, purchase inquiries have decreased and transactions are sluggish. However, some preferred complexes and redevelopment sites are seeing transactions at higher prices, leading to an overall increase in Seoul."

A similar pattern is seen in Gyeonggi Province. Regulated areas such as Gwacheon (from 0.44% to 0.40%) and Bundang (from 0.59% to 0.58%) saw their growth rates slow slightly but still maintained high rates. In non-regulated areas, such as Gwonseon District in Suwon (from 0.13% to 0.21%) and Giheung District in Yongin (from 0.21% to 0.30%), the "balloon effect" led to even greater increases. However, in Hwaseong (from 0.26% to 0.25%), a representative area for the balloon effect, the difference in the rate of increase from the previous week was minimal, and in Guri (from 0.52% to 0.33%), the rate decreased by 0.19 percentage points.

Experts: "Sales Market Will Remain in Wait-and-See Mode for Now... Jeonse Market Moves in the Opposite Direction"

Market experts predict that this phenomenon of "transaction cliff and price maintenance" will continue for the time being.

Park Wongap, Chief Real Estate Expert at KB Kookmin Bank, diagnosed, "Although the market has entered a correction phase, instead of prices falling, transactions have come to a halt and current prices are stagnating-a 'plateau phenomenon.'" Park added, "Concerns about supply shortages persist, and due to abundant liquidity and a booming stock market, homeowners are unwilling to accept price drops. This trend is expected to continue for some time."

Ham Youngjin, Head of the Real Estate Research Lab at Woori Bank, also commented, "Since the October 15 measures, loan and tax regulations, subscription restrictions, and the blocking of gap investments have led buyers to adopt a wait-and-see attitude. Combined with the off-season in winter, the market is expected to remain subdued for the time being."

Ham further noted, "However, in the jeonse (long-term lease) market, the rate of increase is actually expanding, especially in areas with good school districts and some parts of the metropolitan area, so the upward trend is expected to continue for now." In the second week of November, the nationwide average jeonse price for apartments rose by 0.08% compared to the previous week, maintaining its upward trend. In Seoul, it rose by 0.15%, with a shortage of listings particularly noticeable in areas near subway stations and good school districts.