Due to the government’s lending regulations, Seoul apartment transaction volume decreased for three consecutive months. Last month, housing transactions across the metropolitan area, including Seoul, decreased by 7.5%. On the other hand, local housing transactions increased by 24% in one month.
A view of an apartment complex in downtown Seoul. Reporter Jaewon Moon
According to the ‘October Housing Statistics’ released by the Ministry of Land, Infrastructure and Transport on the 29th, the volume of apartment sales in Seoul last month was 4,000 households, down 19.2% from the previous month. This is the lowest transaction volume in six months since April of this year (4,840 transactions).
Apartment sales in Seoul increased for seven consecutive months from 1,790 in December last year to 9,518 in July of this year, and housing prices also fluctuated. However, the number dropped to 7,609 cases in August, when loan regulations began in earnest, and to 4,951 cases in September, when the second stage of stress debt service ratio (DSR) began to be applied. Housing transaction volume in the metropolitan area, including Seoul, decreased by 3.2% to 25,011 cases in October.
On the other hand, transaction volume increased in local areas that are less subject to lending regulations such as reduced stepping stone loan limits. Last month, local housing sales transactions amounted to 31,568 households, an increase of 24.1% from the previous month. Accordingly, the nationwide home sales transaction volume in October (56,579) increased by 10.4% compared to the previous month. Last month, the nationwide housing rental transaction volume (as of the reporting date) was 211,218, an 11.1% increase from the previous month. This is a 0.4% increase from a year ago.
As local housing transactions increase, some of the unsold units appear to be resolving. In October, unsold units in the metropolitan area (13,948 households) increased by 0.4%, but those in regional areas (51,888 households) decreased by 1.9%. The number of unsold homes nationwide was 65,836, a decrease of 1.4% (940 households) from the previous month, marking a decline for the fourth consecutive month.
However, the number of unsold units after completion, called ‘malicious unsold units,’ is steadily increasing. The number of unsold units nationwide was 18,307, an increase of 1,045 households (6.1%) in one month. It is the highest in 4 years and 3 months since July 2020 (18,560 households). In particular, the number of unsold units in Incheon increased 2.8 times in one month, from 555 households in September to 1,547 households in October. Nationwide, Jeonnam had the highest number of unsold units with 2,480 households, followed by Gyeonggi (1,773 households) and Busan (1,744 households).
Among housing supply indicators, construction starts and sales volume are improving. Housing starts last month amounted to 24,170 households, a 15.2% increase over the same period last year. Cumulative construction starts from January to October also increased by 34.0% to 218,177 households. Cumulative construction starts in the metropolitan area increased by 48.6% and in regional areas by 18.5%. The number of units sold last month (based on approval) was 20,416, an increase of 28.3% over the same period last year.
On the other hand, the quantity of licenses, which is a leading indicator of supply, is still showing a sluggish trend. The number of housing permits last month was 26,136 households, an increase of 28.9% compared to the same period last year. However, the cumulative number of permits from January to October this year was 244,777 households, a 19.1% decrease from the same period last year. By housing type, the decline in permits for non-apartments such as villas (-30.0%) was greater than for apartments (-17.3%).
