First-time homebuyers in Seoul hit 4-year high in April

May 20 (Asia Today) -- The number of first-time homebuyers in Seoul reached its highest level in four years and five months in April, as more mid-priced homes entered the market ahead of the end of a capital gains tax relief period for multiple-home owners.

According to the Supreme Court's real estate registry data system, 7,341 buyers applied for ownership transfer registration after purchasing their first condominium-style property in Seoul in April.

The figure was the highest since November 2021, when 7,886 first-time buyers were recorded during a housing market boom. The April number could rise further because ownership transfer registration can be filed within 60 days after final payment.

Market analysts said multiple-home owners appear to be selling properties other than their most valuable homes before the capital gains tax relief period ends. That has increased supply in outer Seoul districts and lower-priced housing markets, drawing more first-time buyers.

By district, Nowon had the largest number of first-time buyers with 623, followed by Gangseo with 582, Eunpyeong with 451, Seongbuk with 445, Songpa with 430 and Yeongdeungpo with 426.

Except for Songpa, most of those districts have relatively high shares of mid-priced apartments.

Buyers in their 30s accounted for the largest share, with 4,231 people, or 57.6% of the total. Buyers in their 40s made up 17.4%, followed by those in their 20s or younger at 11.1% and those in their 50s at 7.8%.

Mortgage rules also appear to have pushed demand toward lower- and mid-priced homes.

Under measures introduced Oct. 15 last year, the mortgage cap for homes priced above 2.5 billion won ($1.8 million) was reduced to 200 million won ($143,000), while the cap for homes between 1.5 billion won and 2.5 billion won ($1.1 million to $1.8 million) was cut to 400 million won ($286,000). Homes priced at 1.5 billion won ($1.1 million) or less remain eligible for loans of up to 600 million won ($429,000).

While the loan-to-value ratio is capped at 40% for first homes and replacement purchases in regulated areas, first-time homebuyers can qualify for ratios of up to 70%.

Analysts said shrinking jeonse rental supply and rising deposit prices have also encouraged some renters to use available borrowing capacity to buy homes in areas where prices had risen less sharply. ('Jeonse' is a rental system unique to Korea where the tenant pays a deposit equal to half or more of the property's market value, lives rent-free for the duration of the rental contract, at the end of which they receive their full deposit back. The landlord makes money by investing the deposit amount.)

-- Reported by Asia Today; translated by UPI

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Original Korean report: https://www.asiatoday.co.kr/kn/view.php?key=20260520010005640

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