Declining High-Priced Apartment Sales and the Exodus from Seoul

In August 2024, apartment sales in Seoul, particularly high-priced properties, saw a significant decline. 

In August 2024, apartment sales in Seoul, particularly high-priced properties, saw a significant decline. Rising prices, combined with the government's tightening of loan regulations, have led some buyers to look beyond Seoul and towards the surrounding regions of Gyeonggi and Incheon. This post will explore the recent changes in Seoul’s real estate market and the growing trend of homebuyers moving to the outskirts.

Seoul's apartment market, which had been steadily increasing in sales earlier this year, saw a sharp decline in August, particularly among high-priced properties. Sales of apartments priced over 900 million won hit their peak in July with 5,160 transactions but have since dropped to 3,295 in August and just 598 in September. In January, there were only 1,215 such transactions, highlighting the rapid growth followed by the sudden slowdown.

This decrease in sales is driven not only by rising property prices but also by the government's tightened loan regulations, including the implementation of the second phase of the Debt Service Ratio (DSR). These stricter lending rules have made it difficult for buyers to secure loans, particularly for high-priced properties. Additionally, the rapid recovery in prices has reduced the number of available listings, further contributing to the decline in sales.

As sales of high-priced apartments slow, some buyers are turning their attention to Gyeonggi and Incheon, where properties are more affordable compared to Seoul. The combination of lower prices and convenient access to Seoul makes these areas an attractive option for those seeking homeownership. Between January and July this year, 11,676 Seoul residents purchased apartments in Gyeonggi and Incheon, a 24.6% increase compared to the same period last year. This trend reflects the growing movement of buyers leaving Seoul in search of more affordable housing options.

In particular, July saw a sharp increase in Seoul residents buying apartments in Gyeonggi and Incheon, with 2,634 transactions. This consistent growth trend indicates that as the price gap between Seoul and the surrounding regions widens, interest in new developments outside of the city is likely to continue growing.

Seoul’s apartment market, led by high-priced properties, is seeing a cooling trend with a notable decrease in sales. At the same time, more and more homebuyers are turning to Gyeonggi and Incheon for affordable housing options. As loan regulations tighten and property prices in Seoul remain high, this shift toward the outskirts is expected to become even more pronounced in the future.