Seoul apartment sale transactions, which had decreased after the Oct. 15 measures last year, turned upward again last month. Contracts signed last month can still be reported until the end of this month.
An analysis of Seoul apartment transaction records filed in the actual transaction price system of the Ministry of Land, Infrastructure and Transport on the 11th showed that, as of the 10th, last December's transaction volume totaled 3,584 cases (excluding public institution purchases and cancellations hereafter), surpassing November's 3,335. Although December contracts still have a considerable period left until the reporting deadline at the end of this month, they already exceed November's monthly transaction volume by more than 200.
In the Seoul apartment market, after the Oct. 15 measures designated all of Seoul as a regulated area and a land transaction permit (land permit) zone, the number of sale reports, which was 8,485 in September and 8,456 in October, dropped sharply to 3,335 in November. However, there are projections that December's monthly transaction volume will exceed at least 6,000.
The recent increase in transaction volume is seen as driven by end-user demand, as buyer sentiment, which had cooled due to the shock of the expanded land permit zones, is recovering. Despite the government's strong lending curbs, home prices have not fallen, prompting demand to move before it is too late.
Another major factor is the "land transaction permit system time lag," as it takes at least 15–20 days for buyers and sellers to obtain local government approval and draw up contracts after a transaction agreement, and more than 30–40 days to file the transaction report due to the expansion of land permit zones. Even if a transaction agreement was made in November, many actual contracts rolled over into December because of the approval process,
In practice, by district, excluding the three Gangnam districts and Yongsan District, which were already land permit zones, and Eunpyeong District in the northern area, the other 21 districts all saw December transaction volumes surpass November's. Nowon District had 230 transactions in November, but 393 have already been reported in December, up about 71% from the previous month. Gangdong District (161), Guro District (238), Dongjak District (112), Yeongdeungpo District (169), and Gwanak District (140) also posted large increases compared with November.
By contrast, the three Gangnam districts and Yongsan District, which had been subject to "triple regulation," saw December transaction volumes fall far short of November. December transaction reports in Gangnam District and Seocho District stand at 127 and 82, respectively, less than half of November contracts (264 and 219), and Songpa District has 229 reported so far in December, smaller than November's 421.
The Seoul apartment sales supply-demand index released by the Korea Real Estate Board (REB) last week also showed that the southeastern region including the three Gangnam districts was 102.6 last week, down from 103.1 the previous week, while the northern region was 102.0, the highest since the third week of October last year (104.8).
The key questions are whether the heavier capital gains tax on multi-homeowners will be reinstated when the grace period sunsets in early May this year, and whether land permit zones will be lifted before the June local elections. On the heavier capital gains tax for multi-homeowners, the government is still "reviewing" and has not presented a clear plan; if the grace period ends, some multi-homeowner listings that had been waiting on the sidelines could hit the market, causing a temporary price drop. The market also expects that the government and the ruling party may lift land permit zones in some areas before the local elections, excluding the Gangnam area and the Han River belt in Seoul and, in Gyeonggi Province, excluding Bundang and Gwacheon.