In the first half of this year, transactions of collective buildings such as apartments, row houses, multi-family homes and officetels were concentrated in the outer districts of Seoul, including Gangseo, Nowon, Eunpyeong and Guro. Analysts said buying interest focused on homes priced under 1 billion won, which fall outside the scope of tighter loan regulations. In Jungnang District, the number of sales transactions jumped 70% from a year earlier.
According to the court's Registry Information Plaza on July 11, applications for ownership transfer registrations due to sales of collective buildings in Seoul totaled 47,651 from January to June this year. That was 9,322, or 24.3%, higher than the 38,329 during the same period last year.
By district, Gangseo had the most with 3,621. Nowon followed with 3,051 and Eunpyeong with 3,050, then Songpa with 2,861 and Guro with 2,445. Of the top five districts by transaction, four—excluding Songpa—were in the outer areas of Seoul.
The growth rate was highest in Jungnang. Applications for ownership transfer registrations for collective buildings in Jungnang rose 70.7%, from 1,226 in the first half of last year to 2,093 in the first half of this year. Eunpyeong increased 56.7%, followed by Gangbuk at 49.3%, Nowon at 46.7% and Seongbuk at 43%.
The increase in transactions in outer Seoul is seen as linked to strengthened loan regulations. In the Seoul metropolitan area and other regulated zones, the maximum mortgage loan limit for purchasing dwellings is 600 million won for homes with a market price of up to 1.5 billion won. It is 400 million won for homes over 1.5 billion won and up to 2.5 billion won, and 200 million won for homes over 2.5 billion won. The lower the price of a home, the greater the room to use loans.
In fact, the average apartment transaction amount in the outer districts with heavy activity was mostly under 1 billion won. According to the Seoul Real Estate Information Plaza, based on sales contracts concluded from June last year to June this year, the average apartment transaction amount in Gangseo was 942.75 million won. Eunpyeong was 872.18 million won, Guro 772.76 million won and Gangbuk 745.01 million won. Jungnang and Nowon were 675.39 million won and 670.94 million won, respectively.
Nam Hyeok-woo of the Woori Bank Real Estate Research Institute said, "In outer Seoul, inflows of end users such as single-person households without homes and newlyweds continue, centered on apartments around 600 million won and small to mid-sized dwellings that can use policy loans," and added, "A shortage of jeon- and monthly-rental listings has also led some tenants to switch to purchases."