After the Oct. 15 measures, apartment transactions in non-Han River belt areas appear to have plunged. The share of transactions for high-priced apartments rose sharply, centered on areas such as the three Gangnam districts (Gangnam, Seocho, Songpa) and Yongsan District, which had previously been designated as land transaction permit zones.
According to the actual transaction price system of the Ministry of Land, Infrastructure and Transport, from the 20th of last month, when the effect of the land transaction permit zones under the Oct. 15 real estate measures took hold, to the 6th of this month, there were 398 apartment transactions in Seoul. Excluding 50 transactions for youth safety housing supplied by public institutions, transactions between individuals drop to 348. After triple regulations were applied—including land transaction permit zones, areas subject to adjustment, and speculative overheating districts—apartment transactions in Seoul fell by about 95% compared with September's sale transactions (8,964).
The Ministry of Land, Infrastructure and Transport (MOLIT) on the 15th of last month designated all of Seoul and 12 areas in Gyeonggi as land transaction permit zones and regulated areas, reducing the apartment loan-to-value (LTV) ratio to 40%. It also tightened lending regulations. Loans are capped at 600 million won for up to 1.5 billion won, 400 million won for 1.5 billion–2.5 billion won, and 200 million won for over 2.5 billion won.
After real estate regulations were tightened, most apartment transactions concentrated in the three Gangnam districts and Yongsan District. During this period, apartment sale transactions in Gangnam, Seocho, Songpa, and Yongsan totaled 286, accounting for 82% of the total. Eight out of 10 transactions were concentrated in the three Gangnam districts and Yongsan. The share of the three Gangnam districts and Yongsan in Seoul's apartment sales volume in September, just before the regulations, was only about 10%. After the regulations took effect, transactions were also active for apartments in Mok-dong and Sinjeong-dong's New Town in Yangcheon District, which had long been designated as land transaction permit zones.
In particular, even within the three Gangnam districts, sale transactions were active in Songpa District. Since the regulations, record-high transactions have been reported one after another. A 59-square-meter exclusive unit at Jamsil Els traded for 3.1 billion won on the 4th, setting a new record high. On the 30th of last month, a 158-square-meter exclusive unit at Olympic Family Town traded for 3.3 billion won, marking a record high.
Ham Young-jin, head of the real estate research lab at Woori Bank, said, "Even within Gangnam, transactions are occurring mainly in Songpa District, where price accessibility is relatively better after the regulations," and noted, "With lending regulations tightened and the government scrutinizing transactions, the perception that Songpa is at least accessible seems to have formed among buyers with cash liquidity."
By contrast, transactions in areas classified as non-Han River belt, such as Guro and Eunpyeong districts, numbered only 27. Only 7.89% of all transactions took place in non-Han River belt areas. After the regulations, as those with limited cash capacity found it harder to buy homes with loans, demand for the non-Han River belt appears to have plummeted. A real estate expert said, "Transactions are occurring mainly for high-priced homes among those with abundant cash liquidity," and pointed out, "As transactions in the non-Han River belt plunge, regulations aimed at curbing home price rises are also tightening the screws on end users."
Accordingly, there is also a move to lift the regulations imposed across Seoul to protect end users. Chun Haram, floor leader of the Reform Party, held a press conference at the National Assembly the previous day and said, "The designation dispositions for areas subject to adjustment in the eight regions are unlawful because they do not meet the legal requirements," and announced that if the government does not withdraw the policy, the party will file an administrative lawsuit within this month. The regions Chun mentioned are four areas in Seoul—Dobong, Gangbuk, Jungnang, and Geumcheon districts—and four areas in Gyeonggi—Uiwang, Jungwon District in Seongnam, and Jangan and Paldal districts in Suwon.