Gangnam Apartment Cash Swaps: Toheo System Plunges Transactions

According to the Office for Government Policy Coordination on the 12th, the 7th Real Estate Illegal Activities Response Council held on this day analyzed housing transactions from September to December 2024 and the same period of the previous year, and found that the volume of foreign housing transactions in Seoul, Gyeonggi, and Incheon all decreased.

Previously, in August of last year, the government designated most areas of the metropolitan area as foreign land transaction permit zones in response to criticism that foreigners were disrupting the market by purchasing high-priced real estate for speculative purposes, and imposed a two-year residency requirement when purchasing a home.

Then, the total number of foreign housing transactions in the metropolitan area decreased by 35% from 2,279 to 1,481. By region, Seoul recorded the largest decrease, down 51% from 496 to 243. Gyeonggi-do and Incheon decreased by 30% and 33%, respectively.

In Seoul, the volume of foreign housing transactions in the three Gangnam districts (Seocho, Gangnam, and Songpa) and Yongsan-gu, which had been classified as speculative overheating districts, areas subject to adjustment, and Tohe districts even before the October 15 measures, decreased by 65%. In particular, Seocho-gu decreased by 88%, showing the largest decrease among the 25 autonomous districts.

In Gyeonggi-do, the decline was noticeable mainly in Ansan, Bucheon, and Pyeongtaek, where foreign transactions were high. Among these, Bucheon’s transaction volume decreased by 51%. In Incheon, among major trading areas such as Bupyeong, Michuhol, Yeonsu, Seo-gu, and Namdong-gu, Seo-gu decreased by 46%.

By nationality, transactions by Chinese nationals decreased by 32% from 1,554 to 1,053, while transactions by American nationals decreased by 45% from 377 to 208. By housing price range, transactions for houses under KRW 1.2 billion decreased by 33%, and transactions for houses priced above KRW 1.2 billion decreased by 53%, with the decline in transaction volume for high-priced houses being greater.

The Ministry of Land, Infrastructure and Transport plans to check whether actual residence is implemented in conjunction with local governments such as the Seoul Metropolitan Government as the actual residence obligation was applied in earnest last month from the transaction permit granted in September of last year in the Tohe area.

First Vice Minister of Land, Infrastructure and Transport Kim Lee-tak said, “The decline in the volume of foreign housing transactions is a sign that the demand that was causing the market to overheat is decreasing,” and added, “We will work closely with local governments to effectively check the implementation of actual residence obligations and establish an order in the real estate transaction market centered on actual demand.”