Seoul: The Seoul city government announced the reintroduction of the "land transaction permission system" in four affluent districts of the capital to stabilize the real estate market. This decision comes less than five weeks after lifting similar regulations in two of these districts.
According to Yonhap News Agency, the Ministry of Land, Infrastructure and Transport has designated the Gangnam, Seocho, Songpa, and Yongsan districts as areas requiring the permission system from March 24 through September 30. This system mandates government approval for property transactions exceeding a certain size in these areas.
The recent surge in home prices prompted this move. The Seoul Metropolitan Government had previously lifted part of the land transaction permission zones in some areas of Gangnam and Songpa districts on February 13. This led to a rapid increase in home prices and a subsequent rise in household loans.
In February, home prices in Seoul rose significantly, marking the highest increase in three months. Concurrently, household loans extended by local banks increased by 3.3 trillion won (US$2.2 billion) from the previous month, the first on-month rise in three months.
In response, the land ministry, Seoul city government, and other related organizations have decided to enforce the transaction permission system in these districts. If house prices continue to escalate, the government may extend the six-month period or designate additional areas with sharp increases in home prices as land transaction permit zones.