The government announced measures to manage household debt last month, including limiting the loan-to-value ratio (LTV) to 600 million won. Consequently, the transaction volume of the highest-priced dwellings in Seoul has significantly decreased.
According to an analysis by the real estate information platform Zigbang on the actual transaction data of Seoul apartments from the Ministry of Land, Infrastructure and Transport, the volume of highest-priced transactions decreased by 74% in the two weeks following the June 27 household debt announcement compared to the previous two weeks (June 13 to 26).
The increase in house prices that began in the Gangnam area has quickly spread to neighborhoods like Mapo, Yongsan, and Seongdong. During this process, both investment demand and purchase momentum from actual buyers surged. As a result, out of a total of 4,693 transactions in the two weeks before the announcement of the measures, 1,141 were counted as highest-priced transactions, accounting for 24.3% of the total transaction volume.
However, following the government's announcement of measures, the market rapidly cooled, significantly reducing both transaction volume and the number of highest-priced transactions. In the two weeks after the announcement, the transaction volume was recorded at 1,312, with 300 highest-priced transactions. The volume of highest-priced transactions decreased by about 74% compared to before the announcement, and the proportion of highest-priced transactions also dropped to 22.9%, a decrease of 1.4 percentage points.
During the two weeks before the announcement of the measures, Seongdong District had the highest volume of 139 highest-priced transactions, which later dropped to 22, an 84% decrease. Mapo District saw a reduction of about 87%, with 18 highest-priced transactions after the announcement.
Gangdong District also reported a decline of 80%, with 23 highest-priced transactions since June 27, while Gangnam District showed a 63% decrease with 41 transactions. Additionally, other districts such as Dongjak (85 transactions to 15), Yeongdeungpo (82 to 18), Gwangjin (50 to 16), Gangseo (34 to 16), and Dongdaemun (30 to 4) also recorded declines in their highest-priced transaction volumes.
A Zigbang official said, "At this point, it is too early to determine the market trends solely based on transaction volumes two weeks after the regulatory announcements, but the overall atmosphere in the housing market of Seoul and the metropolitan area has shifted to a cautious wait-and-see stance. Although the initial confusion regarding funding plans due to loan availability has somewhat settled, the impact of the stringent regulations has led to some adjustments in listing prices of existing properties, and inquiries for purchases have decreased, effectively halting transactions.
He added, "There is also a possibility that demand from areas like Gangnam, which has experienced heightened regulatory intensity, could disperse to relatively less regulated areas," noting that demand-driven buyers searching for relatively lower price ranges could focus on unregulated areas outside Seoul or certain regions of Gyeonggi, warranting additional market monitoring for these areas.