Despite the Oct. 15 real estate measures that designated most of the capital region as subject to the land transaction permit system (the land transaction permit system), apartment sale prices in newly designated regulated areas rose compared with just before the measures.
According to an analysis of actual transaction prices by the Ministry of Land, Infrastructure and Transport (MOLIT) before and after the Oct. 15 measures by real estate brokerage Jiptos on the 14th, the average sale price in newly regulated areas in Seoul (excluding the three Gangnam districts) rose 1.6%, and regulated areas in Gyeonggi Province rose 1.2%.
To accurately measure price changes before and after regulation, the analysis took the implementation date (Oct. 20) of the core of the Oct. 15 measures, the "expansion of the land transaction permit system," as the baseline, and focused on apartments in which at least one transaction occurred for the same complex and the same size during Oct. 1–19 (before the measures) and Oct. 20–Nov. 12 (after the measures).
After the Oct. 15 measures, most of Seoul and key areas in Gyeonggi Province were placed under the land transaction permit system, halting "gap investing," but rising transaction continued.
After the measures took effect, the average sale price in newly regulated areas in Seoul, excluding the three Gangnam districts, rose 1.6% from early October. During the same period, newly designated regulated areas in Gyeonggi such as Suwon and Gwangmyeong also climbed 1.2%, showing an upward trend.
In particular, the upward trend in these regulated areas appears to have been led by ultra-high-priced apartments with sale prices exceeding 1.5 billion won. Under the Oct. 15 measures, the loan limit for apartments over 1.5 billion won was reduced to 400 million won (200 million won for those over 2.5 billion won). However, it appears the buying by cash-rich demand that does not need loans concentrated in regulated areas could not be curbed.
Of the 66 record-high transactions in newly regulated areas in Seoul excluding the three Gangnam districts, 40, or 61%, occurred in apartments priced over 1.5 billion won.
In the three Gangnam districts, which have many high-priced apartments, the average sale price rose 2.2% in a month. A total of 288 transactions, or 81% of all transactions in Seoul, were concluded at record highs.
The "owner-occupancy requirement" in the Oct. 15 measures also appears to have affected preferences for apartment age. Because the requirement means buyers must move in and live there immediately, Jiptos analyzed that the value of assets with high residential comfort (new builds) is rising.
Looking at price trends by building age in Seoul, apartments 10 years old or newer rose an average of 3.4%, the highest rate of increase. That is nearly twice the price growth of apartments "30 years or older" (2.0%) or "11–29 years" (1.4%).
After the Oct. 15 measures introduced an owner-occupancy requirement and loan regulations in regulated areas, demand for gap investing and demand that sought to use loans is shifting to adjacent areas in Gyeonggi Province without regulations.
In nonregulated areas of Gyeonggi Province, the average sale price rose 1.1% after the measures. A total of 182 transactions were recorded at record highs. That is 61 times the number in "regulated Gyeonggi areas" (3 record highs) and 2.8 times the number in "newly regulated areas in Seoul" (66 record highs) during the same period.
In particular, the rally in price increases and record highs concentrated in certain areas with good access to Seoul.
In Guri, the average sale price rose 1.8%, with 28 record highs. Hwaseong also climbed 1.7%, ranking first with 41 record highs. ▲Yongin (up 1.5%, 13 record highs) ▲Goyang (up 1.4%, 11 record highs) ▲Namyangju (up 1.2%, 18 record highs) followed.
Jiptos CEO Lee Jae-yun said, "This round of measures is accelerating the trend of concentrating on one prime home," adding, "As transaction volume in regulated areas plunges, home price gains may appear to be slowing, but continued buying of high-priced apartments will deepen the polarization of asset values."