Seoul: The Seoul city government announced on Wednesday the reimplementation of the "land transaction permission system" in four key districts of the city. This move aims to stabilize the real estate market, following less than five weeks after the regulation was lifted in two of these districts.
According to Yonhap News Agency, the Gangnam, Seocho, Songpa, and Yongsan districts have been designated as areas requiring government permission for property transactions for six months, from March 24 through September 30. The Ministry of Land, Infrastructure and Transport revealed this decision in a press release, explaining that transactions of properties exceeding a certain size in these areas will need governmental approval.
This change will impact approximately 400,000 households residing in the 2,200 apartment complexes across the four districts over the six-month period. The decision follows recent increases in home prices, particularly after the Seoul metropolitan government lifted some of the land transaction permission zones in parts of the Gangnam and Songpa districts on February 13.
The lifting of these zones resulted in a rapid increase in home prices and a subsequent rise in household loans. Home prices in Seoul experienced their most significant increase in three months in February, with household loans from local banks rising by 3.3 trillion won (US$2.2 billion) from January, marking the first on-month increase in three months.
Seoul Mayor Oh Se-hoon addressed the situation, apologizing for the recent housing market volatility. He emphasized the necessity of government intervention in instances of market distortion due to monopoly or speculation. The government plans to respond firmly to any irregular trends in the property market.
The land ministry, Seoul city government, and other relevant organizations have collectively decided on the designation of the three southern Seoul districts and the central Yongsan district as areas requiring government permission for home transactions. The government has also stated that if house prices continue to rise despite this designation, they may consider extending the six-month period or including additional areas with significant price increases as land transaction permit zones.