While tighter lending regulations have halved transactions in Seoul's affluent Gangnam area, Nowon District in the city's northeast is experiencing a surge in buying activity. The district recorded its highest number of purchases by buyers in their 30s in about five years, pushing housing prices upward.
According to the Korea Real Estate Board, 265 buyers in their 30s purchased apartments in Nowon District in February, up 55 from 210 the previous month. This marks the highest figure since January 2021, approximately five years and one month ago. While transaction volumes declined across all other age groups from those in their 20s and younger to those in their 70s and older during the same month, buyers in their 30s were the only group to increase.
Nowon District also stands out in cumulative transaction volumes across Seoul's autonomous districts. According to data compiled by Woori Bank's Real Estate Research Team from February 1 to April 3, Nowon District ranked first with 1,340 transactions, more than double the second-place Seongbuk District at 633. Sanggye-dong alone accounted for 580 transactions, followed by Junggye-dong with 239.
The primary reason buyers in their 30s are flocking to Nowon District is the disappearance of jeonse (lump-sum deposit lease) listings. With the capital gains tax moratorium for multi-home owners set to expire on May 9, landlords who had been renting out properties are rushing to withdraw their listings. Tenants are finding it increasingly difficult to renew contracts or secure new jeonse properties. Real estate agents report a surge in buyers concluding that purchasing is the better option.
Price advantages are also significant. According to the Korea Real Estate Board, the average apartment sale price in Nowon District in February was 650.57 million won, roughly half of Seoul's average of over 1.3 billion won. As Seoul apartment prices have generally risen to around 1.5 billion won, demand has concentrated on lower price ranges, particularly properties around 1 billion won.
"Apartments that were previously around 1 billion won have risen to the 1.5 billion won range, highlighting the value proposition of apartments in the previous 1 billion won bracket," said Nam Hyuk-woo, a researcher at Woori Bank's Real Estate Research Team.
Eligibility for policy loans is another key factor. For homes priced at 600 million won or below, first-time homebuyers can secure up to 420 million won through the Bogeumjari loan program with a loan-to-value ratio of 70% and debt-to-income ratio of 60%. The interest rate stands at 4.55% annually for a 30-year term, comparable to commercial banks' lowest five-year fixed-rate mortgage rates of 4.42% annually.
Land transaction permit applications in Nowon District reached 280 during the first seven days of April (five business days), averaging 56 per day, outpacing the daily average of 48 from the previous month.
The decline in rental listings is expected to continue pushing demand toward purchases. According to Asil, jeonse and monthly rental listings across Seoul have fallen to 33,550 units, down approximately 25% from the start of the year. Northeastern districts including Nowon, Dobong, Dongdaemun, and Gangbuk have seen declines of 40% to 55%. Seoul apartment jeonse listings alone have shrunk by 39.7% over the past year, while Nowon District plummeted 72.1% from 1,837 to 513 units during the same period.
Meanwhile, new apartment supply in Seoul is projected to nearly halve from 31,856 units last year to 16,412 units this year. With rental listings drying up far faster than supply can recover, analysts expect the concentration of buying activity in Nowon District to continue for the time being.