"Should I Sell My House or Not?" Homeowners Express Concerns Amidst Uncertain Market

As South Korea's real estate market faces challenges with tightening loan regulations, homeowners are left contemplating their next steps. 

As South Korea's real estate market faces challenges with tightening loan regulations, homeowners are left contemplating their next steps. The article highlights a significant drop in apartment transactions in Seoul, particularly in the affluent Seocho district, as rising prices deter potential buyers.

In September 2024, the volume of apartment transactions in Seoul is projected to be significantly lower than in previous months, with estimates suggesting around 2,000 transactions compared to over 5,800 in August. The decline is attributed to the government's stricter housing loan regulations and a market that has seen rapid price increases, causing potential buyers to hesitate.

As of now, only 857 transactions have been recorded, and with the transaction reporting deadline still over a month away, the final count is expected to settle around 2,000. This is a stark contrast to the peak of 8,848 transactions in July, marking a downward trend in the market.

Particularly concerning is the situation in Seocho district, where only four transactions have occurred this month. In contrast, there were 470 transactions in June. The highest price recorded recently was 6 billion won for an 84㎡ apartment, leading to buyer reluctance due to the inflated prices.

The rising inventory is also noteworthy, with over 81,709 apartment listings in Seoul, up from about 76,000 last month. The government's implementation of the Debt Service Ratio (DSR) regulations has contributed to this increase in supply, as banks tighten lending practices.

Despite some expectations of potential interest rate cuts following U.S. Federal Reserve actions, analysts suggest that the effects of loan regulations will likely overshadow any such adjustments. Park Won-gap, a senior real estate analyst at KB Kookmin Bank, emphasized that while transaction volumes may drop, a steep decline in apartment prices is unlikely.

In summary, the combination of tightened lending standards and rising prices has left homeowners in a difficult position, contemplating whether to sell their properties in an uncertain market. As the situation unfolds, market dynamics will continue to evolve, impacting both buyers and sellers in the coming months.