The amount covered by gifts and inheritances from parents and others when buying a home in Seoul surged to double last year.
According to an analysis of the Ministry of Land, Infrastructure and Transport's aggregated data on funding plans for purchasing dwellings in Seoul, obtained on the 22nd through the office of Kim Jong-yang of the People Power Party, a member of the National Assembly's Land Infrastructure and Transport Committee, gift and inheritance funds used for purchasing dwellings in Seoul last year totaled 4.4407 trillion won. That is about twice the 2024 total of 2.2823 trillion won.
A dwelling purchase funding plan is a document that discloses the source of funds for acquiring a dwelling, and it must be submitted to the relevant local government within 30 days after signing a sales contract for all dwellings in regulated areas (adjusted areas and overheated speculation zones) and for dwellings priced at 600 million won or more in nonregulated areas.
Gift and inheritance funds used to buy dwellings in Seoul plunged from 2.6231 trillion won in 2021 to 795.7 billion won in 2022, when home prices began to fall. However, after rising to 1.1503 trillion won in 2023, they reached the 4 trillion-won range last year, marking an all-time high.
It is seen as an effect of the government tightening mortgage loan rules. After the real estate measures announced on Oct. 15 last year, dwellings priced at 1.5 billion won or less can be financed with up to 600 million won in mortgage loans, while dwellings over 1.5 billion won to 2.5 billion won and those over 2.5 billion won are capped at 400 million won and 200 million won, respectively. As a result, the share of funds raised through financial institution loans fell sharply. In Seoul's Gangnam District, this ratio dropped from 25.4% in July last year to 10.4% in December. Over the same period, Seocho District fell from 22.8% to 10.3%, and Songpa District from 24.5% to 15.3%.
By district, the area where the most gift and inheritance funds went into purchasing dwellings was Songpa District (583.7 billion won). It was followed by Gangnam District (548.8 billion won), Seocho District (400.7 billion won), Seongdong District (339.0 billion won), Dongjak District (260.9 billion won), Gangdong District (253.1 billion won), Yeongdeungpo District (243.5 billion won), and Yongsan District (211.1 billion won). The share of gifts and inheritances in total funding was highest, by district, in Songpa District (5.2%), Jung District (4.9%), Gangnam and Seongdong districts (4.6% each), Seocho and Dongdaemun districts (4.4% each), Yongsan, Dongjak, and Mapo districts (4.3% each), Yeongdeungpo District (4.1%), and Yangcheon District (4.0%).