Ahead of the implementation of the July phase three total debt service ratio (DSR), demand is concentrating in regions with good access to Seoul, such as Gunpo, Bundang, and relatively more affordable areas like Hanam, Yongin, and Incheon. There are also forecasts that so-called "young-gle" demand will be concentrated in the regions of mid-priced apartments in the metropolitan area that have heavily relied on loans for home purchases.
According to the real transaction disclosure system of the Ministry of Land, Infrastructure and Transport, a 74㎡ unit at "Gami Park Centrebill" in Gami-dong, Hanam, was traded for 1.14 billion won on the 9th, an increase of 95 million won from the previous highest price. A 98㎡ unit at "Raemian Suji East Park" in Suji-gu, Yongin, was traded for 1.25 billion won, rising 130 million won from the previous highest price of 1.12 billion won.
According to the weekly apartment price trends released by the Korea Real Estate Board for the third week of May, the selling price of apartments in Yongin increased by 0.05% compared to the previous week. Especially, Suji-gu, which has good access to Seoul, rose by 0.13%, marking the third highest increase in Gyeonggi Province after Gwacheon and Seongnam. Hanam also saw an increase of 0.04%.
The stress DSR is a system that reduces loan limits by adding a stress additional charge to the interest rate for loans taken by financial consumers. The government has been gradually introducing stress interest rates. In February of last year, as part of phase one, a stress interest rate of 0.38% was applied to bank mortgage loans, and from September of the same year, phase two was implemented, raising it to 1.2% in metropolitan areas and 0.75% in non-metropolitan areas.
When phase three is implemented, the stress interest rate will be applied to the total household loans across the entire financial sector. An additional charge of 1.5% will apply to mortgage loans in metropolitan areas. With the application of phase three, the loan limit for financial consumers with an annual income of 50 million won could drop by up to 50 million won compared to before.
With the implementation of the July phase three stress DSR, there is a prospect that areas with a high proportion of loans during transactions, particularly mid-priced areas, will be hit hard. On the other hand, it seems that the so-called "upper-class areas" such as the three districts of Gangnam (Gangnam, Seocho, Songpa) and Bundang in Seongnam and Gwacheon will not be largely affected by regulations. Buyers in these areas generally have relatively more abundant assets, leading to a higher proportion of transactions without loans. There are also forecasts that the trend of preferring a "single outstanding unit" will become more pronounced, with reduced demand in outer areas and a concentration of demand in upper-class areas.
Experts noted that such a forecast indicates that a last-minute young-gle demand may concentrate in mid-priced apartment dense areas on the outskirts of Seoul and metropolitan areas. Koh Jun-seok, a professor at Yonsei University's Sangnam Management Institute, said, "Demanders looking to purchase mid-priced complexes are significantly impacted by the decrease in loan amounts as the phase three stress DSR is applied," adding that "consumers with tight financial plans may enter the market ahead of the implementation in July."
SEO Jin-hyung, a professor at Kwangwoon University's Department of Real Estate Law, stated, "There will be no major impact on demanders in the three districts of Gangnam, where there are financially comfortable consumers, but for those who cannot secure funds, there will likely be some movement of demanders to outer areas."
Meanwhile, there is a high possibility that the trend of strengthening household loan management will continue even after the presidential election. Lee Eun-hyung, a researcher at the Korea Construction Policy Institute, explained, "In the initial phase of the new government's launch, it is unlikely that there will be any effort to ease loan regulations to activate market demand," and added that "since the activation of transactions involves price increases, it is highly likely that the trend of regulations will be maintained for the time being."