In the first quarter of this year (January to March), the transaction turnover rate of collective buildings such as apartments and multi-family houses nationwide was nearly 15% lower than at the end of last year. While the volume of transactions temporarily rebounded in February following the lifting of the land transaction permission system in Seoul, the average turnover rate in the first quarter remained at 0.3. Looking at the nationwide apartment complexes by exclusive area, the area with the most sales transactions in the past month recorded only 10 transactions. Experts predict that the decision on whether to lower the benchmark interest rate at the Monetary Policy Committee meeting of the Bank of Korea in May will have a significant impact on the activation of the real estate market.
According to the Court Registration Information Portal on the 29th, the transaction turnover rate for nationwide collective buildings (apartments and multi-family houses) in the first quarter ranged from 0.34 to 0.41. In January, it recorded 0.34, and the turnover rate increased to 0.41 in February when the land transaction permission system was lifted in Seoul, but it dropped back to 0.38 in March. The average turnover rate over the three months was 0.37, which is about 15% lower than December of last year (0.44).
Transaction turnover is a figure calculated by comparing the number of effective real estate properties with the number of applications for ownership transfer transactions. It serves as an indicator to gauge the level of activation in the real estate market. A turnover rate of 0.37 means that out of 10,000 real estate transactions, there were 37 sales transactions.
The transaction turnover rate of collective buildings exceeded 0.4 from March to December of last year. It recorded 0.4 in March last year and rose to 0.47 in October. Even during the off-peak season for real estate transactions in December, it remained at 0.44. However, the turnover rate began to decline starting from January this year, when political uncertainty spread due to the declared state of emergency and impeachment.
However, looking at just the apartment transaction volume in Seoul, the first-quarter transaction volume showed signs of recovery. According to the Seoul Real Estate Information Plaza, the number of reported apartment sales (as of the contract date) in 25 autonomous districts of Seoul in January was 3,426, which increased to 6,445 in February and rose to 8,043 in March. It has been 8 months since Seoul's apartment sales returned to the 8,000 range, the last instance being July of last year (8,181 units). The increase in transaction volume was a result of the lifting of the land transaction permission system in February.
However, nationwide, the recovery in transactions has yet to be realized. According to the real estate big data platform Real Estate Jiin, the areas with the most transactions nationwide from March 21 to April 21 were 'Songdo JAI The Star' (exclusive area 84.71㎡) in Songdo-dong, Yeonsu-gu, Incheon, and 'e-Pyeonhwan Sesang Songdo' (exclusive area 70.56㎡) in the same area, with 10 transactions making it the most traded complex nationwide. In Bongcheon-dong, Gwanak-gu, Seoul, 'Gwanak Prugio' with an exclusive area of 59.58㎡ also saw 8 transactions over the month.
During the period from March 21 to April 21, one year ago in 2024, 'Dunsan JAI I-Park' (exclusive area 84.99㎡) in Tanbang-dong, Seo-gu, Daejeon, had 66 transactions, 'Seoshin The Shop Vivaldi' (exclusive area 84.61㎡) in Seosin-dong, Wansan-gu, Jeonju, 41 transactions, and 'Samho' (exclusive area 49.8㎡) in Geumsan-eup, Geumsan-gun, about 40-60 transactions for each exclusive area.
Experts predict that the Monetary Policy Committee meeting of the Bank of Korea, set for May 29, will have a significant impact on whether the benchmark interest rate will be lowered. If the benchmark interest rate and housing mortgage rates decrease, it means that the recovery speed of nationwide apartment transactions will accelerate.
Professor Ko Jun-seok from Yonsei University's Sangnam Institute of Management noted, "The key to the recovery of the real estate market's transactions will depend on whether the Bank of Korea lowers the benchmark interest rate in May," adding, "Since it is already a known fact that there is a shortage of apartment supply in Seoul and the metropolitan area, if borrowing rates decrease, it will widen the opportunities for actual demanders to enter the market (purchase), leading to an increase in transaction volume." Park Hap-soo, an adjunct professor at Konkuk University's Graduate School of Real Estate, also noted, "A decrease in lending rates is expected in the second quarter to stimulate the economy," predicting that the purchasing sentiment in the metropolitan area will gradually recover and transactions will also increase.