Confusion in South Korea‘s real estate market has continued with the transaction volume of Seoul apartments taking a dive while a buying drive by 30-somethings concerned over further price hikes remained strong last month, data showed Monday.
According to data released by the state-run Korea Appraisal Board, a total of 6,880 apartment units changed hands in Seoul last month, down 57 percent from 16,002 in July.
Apartment transactions reached a fever pitch in 2019 with the sales volume increasing from 1,889 in January to 14,117 in December.
Under the pandemic pressure, the figure tumbled to 4,328 in May, but soon rebounded to 11,106 in June, with those aged between 30 and 39 competitively purchasing residential houses.
The 30-somethings accounted for 36.9 percent of the entire transactions last month, the highest among different age groups. Those in their 40s, who had long played crucial roles on the buying side of the housing market, came in second, as they took up 28.3 percent. Throughout this year, those in their 30s accounted for the biggest proportion, outpacing other age groups.
With rising house prices triggering so-called “panic buying,“ the number of relatively affordable apartments in Seoul is also diminishing fast, separate data showed.
According to a report published by the office of Rep. Kim Sang-hoon, the proportion of apartments priced at 600 million won or below in June stood at 29.4 percent in June, down a whopping 67.3 percent from May 2017.
Apartments worth 900 million won or over accounted for 39.8 percent, up 15.7 percent during the same period. Those priced at 1.5 billion won or over marked 15.2 percent, up 3.9 percent.
Having published a report on the housing market recently, Rep. Park Sang-hyeok pointed out a house buying scheme, called gap investment, was one of the main culprits that drove up apartment prices in recent years.
The house buying method allows a home buyer to purchase a house with a relatively small amount of their own money by leveraging a lump sum of two-year rent deposit given by a tenant.
In posh districts like Gangnam, Seocho and Yongsan, some 60 percent to 70 percent of apartments traded last month were carried out through the gap investment method, according to the report.
“The government has to execute its plans to prevent the gap investment scheme in a strict manner to stabilize housing prices,” Park said. The government’s measures to curb apartment prices include tough mortgage criteria and property taxes for those who own multiple homes.
By Kim Young-won (email@example.com