Rising prices and lending rules squeeze buyers as loan ceilings drop from 600 million to 400 million won

Apartment buildings seen from Lotte World Tower in Songpa-gu, Seoul. [Yonhap]
Apartment buildings seen from Lotte World Tower in Songpa-gu, Seoul. [Yonhap]

A growing number of Seoul apartment complexes are crossing the 1.5 billion won (about $981,000) mark, pushing them above the threshold at which buyers can access the maximum 600 million won mortgage limit.

Experts are urging prospective buyers in areas where prices have surged to review their financing plans carefully, including checking updated loan ceilings before committing to a purchase.

According to KB Real Estate data released Friday, the KB market average price for a 59-square-meter unit at Dangsandong 1-cha Hyosung in Yeongdeungpo-gu, Seoul, now stands at 1.525 billion won. Because mortgage limits are set based on KB market valuations, buyers can now borrow only up to 400 million won for that unit.

Just a month ago, the same unit was valued in the 1.4 billion won range, allowing buyers to borrow up to 600 million won — meaning the available loan amount has abruptly shrunk by 200 million won. A year ago, actual transaction prices at the complex were in the high 1.1 billion to low 1.2 billion won range.

In Seongdong-gu, a 59-square-meter unit at Geumho Doosan Apartment now carries a KB market price of around 1.545 billion won. The sale price for the same unit size was 1.25 billion won in January, a rise of 300 million won in just four months. As a result, the equity a buyer must bring to the table has risen by nearly 500 million won when the 200 million won reduction in the loan ceiling is factored in.

Sadang Woosung 2 Complex in Dongjak-gu has also recently crossed the 1.5 billion won mark on the KB valuation scale. The 1,080-unit complex set new price records last month across three unit sizes — 46, 59 and 118 square meters — with a 59-square-meter unit on the 14th floor trading at 1.65 billion won.

The KB general average price for the 59-square-meter unit climbed from 1.475 billion won in January to 1.51 billion won in March, cutting the maximum available mortgage by 200 million won.

The lowest current asking price for the same unit type has since risen further, to 1.68 billion won. Compared with the start of the year, a buyer purchasing the apartment today would need to put up roughly 300 million won more in equity, accounting for the reduced loan limit.

Nam Hyeok-woo, a real estate researcher at Woori Bank, cautioned that when a loan ceiling drops, demand can shift to alternative complexes, leaving the affected development with fewer transactions. "If prices have surged sharply in a short period without enough actual transactions to support them, downside rigidity may be weak," he said. "I would advise against overextending yourself on a purchase."


hope@heraldcorp.com