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Home purchases rise due to worries over tighter lending rules, sentiment shift

Published: 17 Jun. 2025, 18:41 Updated: 17 Jun. 2025, 19:05

A view of apartment complexes in Seongbuk District and Nowon District as seen from Mount Namsan in central Seoul on June 10. [YONHAP]

Home purchases in Seoul surged across all age groups in May as anxiety over tighter lending regulations and shifting real estate sentiment drove buyers back into the market.

A total of 15,684 people filed for ownership transfers of apartment and multifamily units in May, according to data from the Supreme Court’s online registry portal released on Tuesday.

The figure marks a 77.8 percent increase from January, when 8,820 buyers registered their transactions.

The surge spanned all generations. Buyers in their 30s recorded a 102 percent increase during the period, while those in their 40s saw the figure rise by 77 percent. The number of purchasers in their 50s rose by 75 percent, people in their 20s by 46 percent and those in their 60s by 56 percent.

The shift reflects changes in real estate psychology.

Data from KB Kookmin Bank supports this trend. As of June 9, the buyer’s sentiment index for Seoul stood at 82.98 — the highest since late October 2021, when it hit 86.07 during a peak in speculative buying.

The latest index shows a stark regional divide, with southern Seoul, including Gangnam, at 91.71, and northern districts at 73.18.

The price expectation index also rose to 110.3 in May, up from 86.4 at the end of last year.

The Korea Research Institute for Human Settlements reported Seoul’s housing market sentiment index at 131.5 in May, 11 points higher than April. The figure is nearing the highs seen in June and July last year.

Surveys also show more households are considering buying property. The share of respondents who said they plan to purchase a home within six months climbed to 12.7 percent in May, from 7.8 percent a month earlier.

"The real estate market largely depends on buyer sentiment," said Park Won-gap, senior real estate expert at KB Kookmin Bank. "The recent surge in home buying in Seoul comes from a mix of anxiety and urgency as the third phase of the stricter DSR [debt service ratio] rules raises the threshold for getting loans."

The Bank of Korea, in a recent report, warned that expectations for rising home prices could become irrational and disconnected from economic fundamentals.

“If housing price expectations become overheated, the government must ease expectations by expanding housing supply or implementing measures to suppress speculative demand,” the report said.

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.
BY KIM TAE-YUN [[email protected]]