Seoul’s real estate market is increasingly defined by transactions under 1.5 billion won, with nearly nine out of ten apartment sales in the city falling below that threshold this month, according to data released Wednesday.
The shift reflects a tightening of lending regulations and a corresponding decrease in purchasing power for higher-priced properties. Government measures introduced in June and October of last year, collectively known as the ‘6·27’ and ‘10·15’ policies, capped mortgage limits for homes in the Seoul metropolitan area and other regulated zones at a maximum of 600 million won. This has effectively priced many potential buyers out of the upper end of the market.
Analysis of data from the Ministry of Land, Infrastructure and Transport’s real estate transaction system reveals that approximately 87.2% of apartment sales completed this month were for properties valued at 1.5 billion won or less. This trend has been building, with over 80% of sales falling into this category for the past two consecutive months, according to YTN. The Korea Real Estate Board reported 975 apartment transactions in Seoul this month through February 18th, with 850 of those (87.2%) being under 1.5 billion won.
The change is particularly pronounced when looking at overall sales volume. Approximately 81.4% of the 5,684 apartments sold in Seoul in January were priced at or below 1.5 billion won. This represents a significant increase from previous periods, indicating a clear preference for more affordable housing options.
Industry analysts suggest the trend is likely to continue as long as current lending restrictions remain in place. The stricter loan-to-value (LTV) ratios have made it more difficult for buyers to secure financing for expensive properties, leading them to focus on lower-priced alternatives. News1 reported that 87% of prospective buyers are now prioritizing properties within the 600 million won mortgage limit.
The shift towards lower-priced apartments is also impacting the types of properties being sold. Areas with a higher concentration of affordable housing, such as the Guro Hanmaul complex, have seen increased transaction volumes. The Joseilbo reported that Guro Hanmaul was the top-selling complex in December.
The government has not yet commented on the implications of this trend and no immediate changes to the existing lending regulations are anticipated. Further data releases are expected to provide a more comprehensive picture of the evolving dynamics of Seoul’s real estate market.
