The proportion of canceled apartment sales contracts for properties worth more than 1 billion won in the metropolitan area has sharply increased since the government's loan restrictions on June 27.
On the 16th, the real estate brokerage firm Jiptos released an analysis of the status of canceled contracts for metropolitan area apartments that were contracted until the 27th of last month this year. The proportion of canceled contracts for apartments exceeding 1 billion won reported after the announcement of the regulations was noted at 35%. This figure is an increase of 8.1 percentage points from before the regulation (26.9%).
In contrast, the cancellation of sales contracts for apartments valued at 50 million won or less decreased from 32.2% to 25.1%, and for apartments exceeding 50 million won up to 1 billion won, it fell from 40.9% to 40.0%.
In Seocho District, where there are many high-priced apartments, the proportion of cancellations increased from 2.5% before the announcement of the measures to 5.7% afterward, and in Gangnam District, it grew from 5.1% to 6.5%. Jiptos analyzed that concerns over the decline in asset value due to the regulations have led to the contract cancellations.
The area in Seoul with the highest number of contract cancellations after the implementation of the regulations for those that were contracted before June 27 was Gangdong District (38 cases). There were also many cancellations in Yeongdeungpo District (33 cases), Seongdong District (31 cases), Gangnam District (31 cases), Mapo District (29 cases), and Seocho District (27 cases).
Lee Jae-yoon, the CEO of Jiptos, noted, "This measure has thrown a strong signal to the market that 'housing prices will adjust,'" and added, "It triggers asset defense psychology for buyers of high-priced apartments, and loss minimization psychology for 'young-kkeul' buyers, leading them to the same behavior of canceling contracts."