Seoul Apartment Transaction Index Hits 3-Year High, Why the Record Highs in Gangnam?

Seoul's apartment transaction index has hit a 3-year high, reigniting the housing market. As the jeonse (lump-sum deposit) crisis worsens and fears of a supply shortage grow, record-high transactions are surging, centered around the three major Gangnam districts (Gangnam, Seocho, and Songpa).

Jeonse Demand Shifts to Purchases and Market Synchronization

The steep rise in jeonse prices across Seoul throughout the first half of the year has stimulated anxiety among tenants, leading to a massive shift toward purchasing homes. In particular, despite regulations on multiple-home owners, the market's preference for a 'premium single property' has become distinct, rapidly depleting inventory in preferred areas.

As of May, the proportion of high-priced transactions exceeding 2 billion won in Seoul expanded to 13.6%. Major leading apartment complexes in areas like Banpo are setting new record highs daily for both jeonse and sales. This upward trend in Gangnam is spreading to non-Gangnam areas, driving up overall Seoul housing prices through a 'price synchronization phenomenon'.

Experts analyze that even amid policy uncertainties, the buying trend among actual end-users, focusing on newly built large complexes near subway stations, will continue for the time being.

Real Estate Market Core FAQ

• Q. Should I buy a Seoul apartment now?
  A. A selective approach is necessary, focusing on areas with a high jeonse-to-purchase price ratio or newly built complexes with transportation upgrades. However, market fatigue from short-term spikes must also be considered.
• Q. What does the rise in the transaction index mean?
  A. The closer the index gets to or exceeds the baseline (100), the more buyers there are than sellers in the market, which is interpreted as a strong signal of price appreciation.
• Q. What is the housing price outlook for the second half of the year?
  A. The Bank of Korea's potential interest rate cuts and the government's announcement of additional real estate policies are key variables. A strong stable trend is expected in the short term.