On the day the Oct. 15 housing market stabilization plan was announced, end users rushed to make last-minute purchases in parts of Seoul and the greater capital area that were designated as regulated zones. As buyers hurried to sign contracts to avoid the curbs, they lost ground in price talks, and a string of record-high transactions was reported on the day of the announcement.
According to the Ministry of Land, Infrastructure and Transport's actual transaction price disclosure system on Oct. 19, an 82-square-meter exclusive unit at Jayang 9th Hyundai Hometown in Gwangjin District, Seoul, found a new owner for 1.8 billion won (fourth floor) on Oct. 15. Compared with the same size and floor that sold for 1.5 billion won on June 20, the price rose 300 million won in about four months.
In Yangcheon District, a 59-square-meter exclusive unit at Raemian Mokdong Adelice also set a new record when it changed hands for 1.55 billion won (22nd floor) on Oct. 15. Just before the June 27 measures were announced, on June 25 a unit of the same size was transacted for 1.42 billion won (26th floor) and slipped into the 1.4 billion won range, but it climbed another 130 million won in four months.
In Gyeonggi Province, in Gwacheon, which was also designated as a regulated zone, a 94.95-square-meter exclusive unit at Raemian Surr in Wonmun-dong hit an all-time high of 2.19 billion won on Oct. 15. Likewise, in Seohyeon-dong, Bundang District, Seongnam, which is also tied up as a regulated zone, an 84-square-meter exclusive unit at Sibeom Hanyang sold for 1.98 billion won (ninth floor) on Oct. 15. That was up 160 million won from the previous record for the same size—1.82 billion won (second floor) on Sept. 2—setting a new high in about a month and a half.
Afterward, an 84-square-meter unit at Banpo Hillstate in Seocho District traded for 4.3 billion won on Oct. 18; an 84-square-meter unit at Mapo Xi in Mapo District for 2.53 billion won; and an 84-square-meter unit at Park View in Bundang District, Seongnam, Gyeonggi Province for 2.59 billion won, with each sale concluding a purchase contract.
Earlier, on Oct. 15, the government announced the Oct. 15 housing market stabilization plan, which in one sweep designated 25 autonomous districts in Seoul and 12 areas in Gyeonggi Province as speculative overheating districts, areas subject to adjustment, and land transaction permit zones.
Starting Oct. 16, the loan-to-value (LTV) ratio in regulated areas for those without a home (including those with one dwelling under a disposal condition) was tightened to 40% from the previous 70%. Beginning Oct. 20, 37 regions designated as regulated areas will be bundled into land transaction permit zones, imposing a two-year owner-occupation requirement, making "gap investment," or buying a home with a jeonse tenant in place, impossible.
As apartment buyers rushed to purchase to avoid the curbs, they lost out in price negotiations with sellers, leading to continued record-high transactions.
Under the latest real estate measures, dwellings priced at 1.5 billion won or less retain the 600 million won cap from the June 27 plan, but those over 1.5 billion won and up to 2.5 billion won are limited to 400 million won, and those over 2.5 billion won are limited to 200 million won, reducing loan amounts.