After the June 27 loan regulations, half of the reported transactions for apartments in Seoul were found to be for dwellings priced at 900 million won or below. It is analyzed that the majority of purchases were made for low-priced apartments due to the mortgage loan limit being capped at 600 million won.
According to the real transaction price system of the Ministry of Land, Infrastructure and Transport, from June 28 to August 10, a total of 4,646 valid transactions for Seoul apartments were reported in the 43 days following the June 27 loan regulations. Among these, transactions below 900 million won accounted for 49.5% (2,052 cases).
In comparison to the 43 days prior to the loan regulations (from May 16 to June 27), where the share of transactions below 900 million won was 37.7% (5,473 cases), this share has increased by 11.8 percentage points. This excludes low-priced, ultra-small apartments purchased by public institutions for rental business and cases of contract cancellations.
Overall, transactions have contracted after the loan regulations, but the relatively larger share of transactions below 900 million won is largely analyzed to be due to the mortgage loan cap being limited to 600 million won.
Currently, districts outside the regulated areas, such as Gangnam's three districts and Yongsan District, have a loan-to-value ratio (LTV) of 70%. Assuming the maximum LTV, the price cap for dwellings at the loan limit of 600 million won is 900 million won.
Starting in July, the implementation of the three-phase stress debt service ratio (DSR) has also been analyzed to have affected the emphasis on low-priced transactions by reducing the loan limits relative to income.
Among these, the share of transactions for apartments priced at 600 million won or below increased from 14.7% before the loan regulations to 22.8% after, marking an increase of 8.1 percentage points, the largest increase recorded. The share for apartments priced above 600 million won and up to 900 million won grew from 23.0% before the loan regulations to 26.8% after, an increase of 3.8 percentage points.
In contrast, the share of transactions for units priced above 900 million won and up to 1.5 billion won decreased from 34.7% during the 43 days before the loan regulations to 28.6% after, reflecting a reduction of about 6 percentage points.
In particular, the share of transactions for units priced above 1.5 billion won and up to 3 billion won, which accounted for 23.0% before the loan regulations, dropped to 15.6% after, representing the largest decrease of 7.4 percentage points.