Following the reassignment of the land transaction permission zones by Seoul City, a 'balloon effect' is being observed in areas densely populated with mid-to-low priced apartments such as Nowon and Dongdaemun districts. This outcome contrasts with expectations that demand would flock to popular, non-regulated areas like Mapo, Seongdong, and Gangdong districts.
On the 19th, the Wealth Management Division of Woori Bank analyzed the actual transaction prices released by the Ministry of Land, Infrastructure and Transport up until the 13th of this month. In Nowon District, the cumulative change rate of the sales price index during the land use regulation lifting period (February 10 to March 24) was recorded at -0.11 points. However, after the reassignment (March 31 to May 12), it improved to -0.01 points. A clear recovery was also noted in Dongdaemun District (-0.04 points to 0.17 points) and Guro District (0.02 points to 0.26 points) during the same period.
Gwangmyeong City in Gyeonggi Province also improved from -1.21 points to -0.39 points during the same period, while Seongnam City similarly improved from 0.11 points to 0.77 points. It has been analyzed that the price increase trend is spreading to areas that have been relatively slow to rise in prices and where obtaining loans is easier.
Nam Hyeok-woo, a real estate researcher at Woori Bank's Wealth Management Division, noted, "It is estimated that the inflow of investment demand is easy in areas where mid-to-low priced established apartments are concentrated, or that actual demand is flowing into places where relatively affordable new apartments are gathered."
On the contrary, in areas like Mapo, Seongdong, and Gangdong districts in Seoul, as well as Gwacheon City in Gyeonggi Province, where reflective benefits were anticipated, the balloon effect was not pronounced. In terms of transaction volume, it showed a trend similar to regulated areas. The transaction volume in the three districts of Gangnam and Yongsan in April was recorded at 12 to 89 transactions per area, reflecting a decline of 89.9% to 97.7% compared to March. This resulted in figures lower than those recorded in January, which had the lowest transaction volume this year.
In Gwacheon City, the number of transactions decreased significantly from 138 in March to 31 in April, following Gangnam District (67 transactions), Seocho District (12 transactions), Songpa District (89 transactions), and Yongsan District (21 transactions). These areas appear to show some stagnation due to accumulated fatigue from rapid short-term price increases. However, despite the decline in transactions in the three districts of Gangnam and Yongsan, some preferred complexes with scarce listings are still renewing record-high prices.
Researcher Nam Hyeok-woo stated, "In popular areas of Seoul, purchasing power is weakening due to price burdens and tightening loan regulations," and added, "It is expected that the movement of actual demand seeking alternatives in other areas will continue for the time being."