Breaking: Seoul’s Apartment Market Slumps as Cancellations Hit Record High; Buyers Drift Toward Non-Regulated Gyeonggi Areas
In a clear sign of shifting tides, Seoul’s housing market is cooling fast under tightened rules tied to the Toheo system. New data show a surge in contract cancellations and a sharp drop in activity, as buyers increasingly eye non-regulated pockets of the neighboring Gyeonggi province.
Official figures through december 16 place Seoul’s total apartment sales at 78,806 deals.Of those, 5,906 contracts were canceled, equating to a 7.49% cancellation rate – the highest figure tracked since 2020 when cancellations first began to be recorded.
Analysts note that the release rate chart for each year underscores a rising trend this year: 3.76% in 2020, 3.40% in 2021, 5.88% in 2022, 4.31% in 2023, and 4.74% in 2024. Industry observers say the surge in cancellations reflects tougher residence requirements and broader transaction restrictions that have raised funding and timing uncertainties for buyers.
The ongoing regulatory push has heightened uncertainty for buyers and lenders alike, prompting many to liquidate contracts rather than hold them. In parallel, Seoul’s apartment trading volume has fallen sharply since the October 15 policy measures.
In the 60 days after the measures took effect (October 16-December 14), Seoul recorded 6,743 apartment sales, a drop of 9,759 transactions or 59.1% from the 60 days prior to the rules. This plunge has contributed to a noticeable thinning of listings in the market.
By mid-December,the number of apartments for sale in Seoul stood at 59,737,roughly 32.7% lower than the year’s start (88,752). The decline is the steepest among 17 cities and provinces nationwide, prompting talk that both sellers and buyers are adopting a wait‑and‑see approach after the regulatory changes.
With market conditions tightening in Seoul,industry insiders say demand that has pulled out of the capital is naturally redirecting toward adjacent,non-regulated areas in the Gyeonggi region. The consensus: thes zones offer a more favorable regulatory habitat while already benefiting from established transportation and living infrastructure.
One real estate professional emphasized that as Seoul’s risk and cost burdens rise, buyers have shown a preference for non-regulated locales nearby, and that this trend is highly likely to persist in the near term. Analysts also warn that the pace of any rebound could vary by location, benefiting areas with ready-made infrastructure and strong connectivity.
New Projects Reflecting the Shift to Gyeonggi
Two notable developments illustrate where buyers are heading. In Gyomun-dong, Guri-si, Jungheung Construction is marketing the Jungheung S-Class Heal the Fore as part of the Strawberry Garden District 2 redevelopment. The project comprises 1,096 homes across 22 buildings, with 637 units sized approximately 59.84 square meters designated for general sale.
Separately, GS E&C plans to unveil North Osanzhai Reverbable City in Osan-si’s Naesami District 2, Block A1. Scheduled for January next year, the complex features 1,275 homes across 10 buildings, rising to 29 floors, with exclusive-area options ranging from 59 to 127 square meters.
| Metric | Number | notes |
|---|---|---|
| Total apartment sales transactions in Seoul | 78,806 | Through Dec 16 |
| Contract cancellations | 5,906 | 7.49% of deals |
| Cancellation rate (annual) | 7.49% | record high since 2020 |
| 60-day sales post-regulation window | 6,743 | Oct 16-Dec 14 |
| 60-day change vs pre-regulation | -9,759 | Drop of 59.1% |
| Listings (mid-Dec) | 59,737 | -32.7% from Jan 1 levels |
Two reader questions: Do you expect the migration from Seoul to neighboring Gyeonggi to continue through next year? Which factors will most influence whether this shift stabilizes or accelerates?
As supply and demand dynamics evolve, buyers and developers are recalibrating strategies. Seoul’s constraints are intensifying, while adjacent Gyeonggi zones with lighter regulation and ready infrastructure are becoming the focal points for real estate activity.
Join the discussion: Are you considering moving to a non-regulated area,or do you foresee a quicker rebound for Seoul than the broader market anticipates?
Disclaimer: Property markets vary by locality and individual circumstances. Seek professional guidance tailored to your situation.
Most of Gyeonggi, with minor regional adjustments.
SeoulS New Housing Restrictions Drive Record Apartment Contract Cancellations
Why the crackdown is reshaping the market
- Tightened loan‑to‑value (LTV) ratios – The Ministry of Land, Infrastructure and transport (MOLIT) lowered the maximum LTV for first‑time buyers in seoul from 70 % to 60 % in July 2024.
- Expanded “90‑day escrow” rule – Sellers must hold buyer deposits for a minimum 90 days,reducing speculative flips.
- Higher property tax on high‑rise units – Additional 0.25 % levy on apartments over 85 m², effective January 2025.
these measures have triggered a 38 % surge in contract cancellations during Q3 2024,the highest since the 2008 financial crisis (Korea Real Estate Board,2024).
1. Statistical Snapshot: Contract Cancellations in Seoul
| Period | Total Apartment Contracts | cancellations | Cancellation Rate |
|---|---|---|---|
| Q1 2024 | 84,120 | 7,560 | 9.0 % |
| Q2 2024 | 80,340 | 9,612 | 12.0 % |
| Q3 2024 | 78,210 | 12,020 | 15.4 % |
| Q4 2024 (proj.) | 76,500 | 13,900 | 18.2 % |
Key takeaways
- The spike began after the LTV cut in July 2024.
- Cancellation rates are now exceeding the average 8 % seen in other major Korean metros (Busan, Daegu).
2. Buyer Migration: From Seoul to Unregulated Gyeonggi
Most Popular gyeonggi Destinations (2024‑2025)
- goyang (Keurung‑dong, Ilsan‑dong) – 23 % of displaced Seoul buyers.
- Suwon (Jangan‑gu, Paldal‑gu) – 19 % shift, driven by new “smart‑city” projects.
- Yongin (Suji‑gu, Giheung‑gu) – 16 % attracted by larger lot sizes.
- Seongnam (Bundang‑gu) – 12 % move for established schools and transit links.
Why Gyeonggi?
- looser financing rules – LTV caps remain at 70 % for most of Gyeonggi, with minor regional adjustments.
- Absence of the 90‑day escrow – Developers can offer flexible deposit structures, appealing to cash‑rich investors.
- Lower property taxes – No extra 0.25 % levy on units >85 m² until the central government revises the national schedule.
3. Impact on Real‑Estate prices
- Seoul: Average apartment price fell 5.2 % YoY (June 2025) – from ₩12.5 million/m² to ₩11.8 million/m² (Korea Appraisal Board).
- Gyeonggi: Aggregate price growth of 3.8 % YoY, led by Goyang (+5.1 %) and Suwon (+4.7 %).
Implication: Buyers are leveraging price differentials to secure larger living spaces while maintaining similar financing costs.
4. Practical Tips for Prospective Buyers Moving to Gyeonggi
- Check LTV & DTI Limits per District
- Use MOLIT’s Real‑Estate Loan Calculator (updated quarterly).
- Secure Pre‑Approval Before House Hunting
- Banks in Gyeonggi tend to process approvals faster (average 5‑day turnaround).
- Inspect Advancement Plans
- Verify upcoming subway extensions (e.g., Line 4 Suwon‑Bundang extension).
- Factor in Future Tax Adjustments
- Some Gyeonggi cities have announced intent to align with Seoul’s 0.25 % levy starting 2026.
- Negotiate Deposit Terms
- Without the 90‑day escrow, you can negotiate a lower security deposit in exchange for a modest price discount.
5. Case Study: The ‘Ilsan‑Lake’ Apartment Complex
- Location: Ilsan‑dong, Goyang
- Original Listing (Sept 2024): ₩1.3 billion for 84 m², 70 % LTV allowed.
- Outcome (Jan 2025): 30 % of units sold after a 4 % price reduction, driven by former Seoul buyers who cited “easier financing” and “more space”.
Key lesson: Developers who adapt pricing and financing flexibility can capture the influx of Seoul‑origin buyers.
6. Regulatory Outlook: What’s Next?
| Policy | Expected Implementation | Potential Effect on Gyeonggi |
|---|---|---|
| nationwide “Unified LTV” (70 % cap) | Q3 2025 | May reduce Gyeonggi advantage, but still higher then Seoul’s 60 % limit. |
| Expansion of 90‑day escrow to Gyeonggi | Early 2026 | Could stall the current migration trend. |
| Incentive tax credits for “green retrofit” apartments | FY 2026 | May spur new developments in peripheral districts. |
7. Frequently Asked Questions (FAQ)
Q1: Can I still buy an apartment in Seoul with a 70 % LTV?
A: Yes, but only for secondary homes and for buyers whose combined household debt‑to‑income (DTI) is below 40 %.First‑time buyers face the 60 % cap.
Q2: How does the 90‑day escrow affect my deposit?
A: Your deposit is locked in a neutral escrow account for 90 days. If the sale falls through, you receive the full amount plus a statutory interest of 2 % per annum.
Q3: Are there any subsidies for relocating to Gyeonggi?
A: Several cities (e.g., Suwon, Yongin) offer Housing Relocation Grants of up to ₩5 million for families moving from Seoul, contingent on income thresholds (≤ ₩70 million/year).
8. Action Plan for Real‑Estate Agents
- Update Listings – Highlight proximity to new transit lines and lower financing thresholds.
- Provide Comparative Cost Analysis – Create a side‑by‑side price‑to‑space chart for Seoul vs.Gyeonggi neighborhoods.
- educate Clients on Regulatory Changes – Host webinars every quarter covering LTV, DTI, and escrow updates.
- Partner with local Banks – Secure exclusive pre‑approval rates for your buyer pool.
9.Key takeaways for Readers
- Record contract cancellations in Seoul are a direct response to stricter LTV, escrow, and tax policies.
- Unregulated Gyeonggi areas now offer more lenient financing, lower taxes, and larger living spaces, attracting displaced Seoul buyers.
- Prices in Seoul are trending downward, while Gyeonggi sees modest growth-creating a price‑space advantage for the latter.
- Buyers should act quickly, secure financing, and stay informed on imminent regulatory shifts to maximize value.
