The official from A Real Estate Agency in Jamsil-dong, Songpa-gu, said, "It seems that the price difference between what buyers and sellers hope for exceeds 300 million won. While discounted properties sometimes come out, transactions are not happening easily."
On the 21st, officials from real estate agencies near the so-called El-Ri-Trieium (Jamsil Els, Ricents, Trijium) in the early phases of the Songpa-gu district and the Raemian Daechi Palace in Daechi-dong noted that transactions have sharply decreased since the announcement of the household debt measures on June 27.
After the government implemented the June 27 household debt measures, which limit mortgage loans for dwellings in the metropolitan area to a maximum of 600 million won, house price increases in the three districts of Gangnam (Gangnam, Seocho, Songpa) have also slowed, and there is a wait-and-see attitude as asking prices have dropped.
The June 27 measures included a requirement for buyers to move in within six months if they take out a mortgage for the purchase of dwellings in the metropolitan area, which aims to block speculative demand, and also included a cap on mortgage loans of 600 million won. With the enforcement of mandatory occupancy, gap investment has become virtually impossible. Considering that the average price of apartments in Seoul is about 1.3 billion won, a cash amount of over 700 million won is now required.
Despite the announcement of the measures, the upward trend in house prices in Seoul continued, although the increase has slowed. According to the Korea Real Estate Board (REB) weekly apartment price trends, the sales price of apartments in Seoul rose by 0.19% in the second week of this month (as of the 14th) compared to the previous week. The increase has decreased compared to the previous week's 0.29%, indicating a three-week consecutive decline in the rate of increase.
In the southeastern region, which includes the three districts of Gangnam, the increase rate decreased from 0.37% to 0.26%. All of the three districts saw a decline in the rate of increase: Gangnam (0.34% to 0.15%), Seocho (0.48% to 0.32%), and Songpa (0.38% to 0.36%). Gangdong-gu, which had been influenced by the rising trend adjacent to the three districts, also saw its increase rate decrease from 0.29% to 0.22%.
With the slowdown in the upward trend, transactions have also sharply decreased. According to the Seoul Real Estate Information Plaza, last month there were 11,349 apartment sales transactions in Seoul, but this month (as of the previous day's report), there were only 1,414.
Both actual transaction prices and asking prices are on a decreasing trend. The 84㎡ unit of 'Raemian Grayton 2' in Yeoksam-dong, Gangnam-gu, was sold for 3.3 billion won on the 20th of last month but dropped to 3 billion won on the 4th of this month, a decrease of about 300 million won. The 84㎡ unit of Helio City in Garak-dong, Songpa-gu, was sold for 2.2 billion won on the 7th, falling 500 million won compared to the 2.7 billion won price recorded on the 5th of last month. The asking price for the 84㎡ unit of Raemian One Bailey, considered a top-notch district in Banpo-dong, also listed at 6.5 billion won, which is more than 700 million won down from the record-high price of 7.2 billion won.
An official from B Real Estate Agency in Jamsil-dong, Songpa-gu, commented, "In the case of discounted properties, they sometimes appear 100 million to 200 million won cheaper, but buyers are not readily coming forward, thinking prices will drop further. I believe the wait-and-see attitude will continue until subsequent measures are announced."
An official from C Real Estate Agency in Jamsil-dong remarked, "Previously, there were inquiries about upgrading to a higher-end property through loans, but those inquiries have ceased due to lending restrictions. Now, individuals need to have more than 1 billion won in cash, which is rare, making transactions difficult."
Reactions indicate that high-end complex homeowners are also withdrawing listings. An official from C Real Estate Agency in Daechi-dong, Gangnam-gu, stated, "One discounted property is listed at a price about 300 million won lower than the market price, and since the announcement of regulations has created an atmosphere that prices may decline, homeowners are not in a hurry, saying they will sell later and are taking their properties off the market. It seems that a game of caution will continue for the time being."
An official from D Real Estate Agency near Raemian One Bailey in Banpo-dong said, "Most homeowners here are not in urgent need of money, so they are generally taking a wait-and-see approach."
Experts also forecast that a wait-and-see attitude will continue for some time. Song Seung-hyun, CEO of Urban and Economy, said, "As the newly launched government has warned of additional regulations, the wait-and-see attitude is expected to continue until the third quarter. If the rate of increase continues to slow, there is a possibility that prices will adjust around asking prices in Gangnam as well. However, it is difficult to expect a sharp decline as significant as the previous rapid rise, and adjustments will likely only reach a certain level."
Kim Hyo-sun, chief real estate officer at NH Nonghyup Bank, stated, "During the period when lending regulations are in effect, it appears that the wait-and-see stance will persist. Since lending regulations tend to be short-term measures, as household debt management reaches a certain level, there will be calls for the need for revitalization of transactions." She noted, "In the Gangnam area, the proportion of equity held by owners is not substantial, making it unlikely that a lot of low-priced discounted properties will emerge, so it is expected that the overall Gangnam real estate market will not suffer significant damage."