Real estate sales drop to lowest on record in March

The housing market continued to slow in March as residential real estate purchase transactions dropped to the lowest recorded level for the month.

The Ministry of Land, Infrastructure and Transport said Thursday in a monthly report that housing purchases for last month stood at just 51,357 units, a 44.7 percent drop from 92,795 transactions in the same month last year. The government began collecting data in 2006.

Even considering the bullish run of the market last year, the figure for this month was a 42.9 percent fall from the five-year average for the month, at 89,951.

Seoul’s housing market recorded only 5,633 purchases, plummeting 76.6 percent from the previous year. Purchases in the four districts south of the Han River, which led the housing rally last year, fell nearly 80 percent.

Purchase transactions in regions outside of the capital area fell 25 percent, offsetting the steep drop in the capital.

A total of 31,760 apartments changed hands nationwide, a 48.8 percent on-year drop. Purchases of housing other than apartments fell 36.3 percent from the previous year.

Analysts said that the slowing market was due to government measures last September intended to cool the market.

“As housing prices continued to soar last year centered on Seoul, the government announced six stabilization measures that led the market to slow,” said KB Financial Group in a report.

“Especially since the September measures that strengthened regulations on loans, housing purchase transactions have decreased fast and the upward trend for purchasing prices has slowed.”

February and March is traditionally seen as a lively period for the real estate market as families move in and out with the start of the school semester and seasonal changes.

Purchase transactions from January to March this year, however, were at just 145,087, falling 37.7 percent compared to the same period last year. It was also a 35.8 percent fall from the five-year average.

Experts anticipate the slowing trend continuing.

“There aren’t a lot of factors for the market sentiment to change in the short term,” explained Kim Eun-jin, head of research at Budongsan 114, a real estate tracker. “As the impact of the regulations is currently being realized […] buying sentiment is currently very low.”

Land Minister Kim Hyun-mee also stated earlier this month that the government will continue measures to stabilize the real estate market in a speech at the Sejong government complex.

Meanwhile, housing rental transactions also inched down 0.6 percent in March from the previous year.

Kim explained that the statistic indicates a drop in demand for families in rental houses to move.

BY CHAE YUN-HWAN [chae.yunhwan@joongang.co.kr]