As gap investing is curbed, non-resident purchases of Seoul apartments hit 9-year low

After the Oct. 15 real estate measures designated all of Seoul as a land transaction permit zone and imposed tough lending curbs, the share of Seoul apartments bought by people living outside the city fell to its lowest level in about nine years. In contrast, the share of apartments in other regions purchased by Seoul residents has increased.
According to a Korea Real Estate Board (KREB) survey released on the 5th on apartment transactions by buyer residence, there were 20,810 reported Seoul apartment sales between last November and this February. Of these, buyers from outside Seoul accounted for 3,914 transactions, or 18.81%. This is nearly 5 percentage points lower than the 23.06% recorded in the previous four months (July–October). It is also the lowest share in about nine years, since the 18.45% recorded from February to June 2017.
The decline in the share of non-Seoul residents buying Seoul apartments is largely attributed to the Oct. 15 real estate measures, which turned the entire city into a land transaction permit zone and introduced a mandatory self-occupancy requirement. This effectively shut down gap investing, where buyers use jeonse tenants to cover part of the purchase price. In addition, the reduction of available loan amounts to 200–600 million won appears to have made it more difficult for non-residents to enter the Seoul market.
In fact, the drop was particularly steep in the Han River Belt areas, which had driven last year’s rise in Seoul apartment prices.
Conversely, after the Oct. 15 real estate measures, the share of apartments in other regions, including provincial areas, purchased by Seoul residents rose to 6.29%, up from 5.62% in the four months immediately before the measures. In particular, in February this year, Seoul residents accounted for 6.67% of apartment purchases outside the city, the highest level in three years and eight months since June 2022 (6.93%).
going@fnnews.com Choi Ga-young Reporter