The high-intensity lending regulations contained in the June 27 real estate measures have resulted in a reduction to half the level of transactions involving apartment sale and occupancy rights in Seoul.
According to the Ministry of Land, Infrastructure and Transport's real transaction disclosure system on the 27th, 110 transactions (excluding contract cancellations) of apartment sale and occupancy rights reported over the two months from the implementation date of the June 27 measures, June 28 this year, to the day before were recorded.
This represents 48.9% of the transaction volume (225 transactions) during the two months before the measures were implemented (April 29 to June 27).
Occupancy rights refer to the rights of members of redevelopment and reconstruction associations to occupy new apartments in the future. Sale rights mean the rights of general individuals to occupy new apartments through the subscription system.
When purchasing occupancy rights or sale rights, it is common to pay the seller a premium along with the down payment at the time of contract. The structure involves sequential payments of the installment payments and the balance due until occupancy.
As the June 27 measures limit the upper limit of housing purchase mortgage loans to 600 million won and implement the three-step total debt principal and interest repayment ratio (Debt Service Ratio, DSR) from July this year, obtaining loans for balance payments has become difficult.
As lending regulations are also applied to sale and occupancy rights transactions, those who had planned to pay off the balance for apartment sale rights or occupancy rights through high-value loans seem to have postponed their plans.
Since the implementation of the June 27 measures, there have been 16 occupancy rights transaction contracts (14.5%) in the three districts of Gangnam (Seocho, Gangnam, and Songpa). Transactions involving newly built high-priced apartment occupancy rights are still occurring mainly among buyers with sufficient cash liquidity.