First-time buyers in Seoul hit record share of home purchases

First-time buyers account for 45% of Seoul collective building sales from January to May; those in their 30s make up 56% of purchases, snapping up tenanted properties en masse; demand from non-homeowners also surges in Dongtan, buoyed by semiconductor bonuses

Property listings posted at a real estate agency in Gangnam-gu, Seoul. [Yonhap]

First-time homebuyers in Seoul have reached a record share of total property purchases this year, driven by relatively relaxed mortgage regulations and a government exception allowing non-homeowners to buy tenanted properties. The trend has been most visible in outer Seoul districts concentrated with mid-to-low-priced complexes such as Nowon-gu, while demand from non-homeowners has also continued in Dongtan, fueled by semiconductor industry bonuses.

Of the 72,025 collective building sale registrations filed in Seoul from January through May, 32,843 — or 45.6 percent — were by first-time buyers, according to the Supreme Court's Registry Information Plaza. That means nearly half of all Seoul real estate transactions this year were made by people who had never owned a home. The figure is the highest since records began in 2010 and marks an increase of more than 9 percentage points from 36.5 percent during the same period last year.

The surge in first-time purchases was particularly pronounced in non-Gangnam districts with a higher share of mid-to-low-priced listings, and buyers in their 30s drove much of the demand.

Nowon-gu posted the highest share of first-time collective building purchases in Seoul at 60.6 percent, followed closely by Seongbuk-gu at 59.8 percent. At the other end of the spectrum, Gangnam-gu recorded the lowest share at 31.6 percent, with Seocho-gu at 32.7 percent, Yongsan-gu at 33.4 percent, Gwangjin-gu at 34.5 percent and Jung-gu at 35.5 percent — all remaining in the 30-percent range.

Analysts attribute the rise in first-time buyers to more accessible mortgage conditions. The government capped home mortgage loans in the greater Seoul area at 600 million won (about $394,000) under its June 27 measures last year, then applied differentiated loan limits by property price bracket under its Oct. 15 measures.

An apartment complex in central Seoul. [Herald DB]

The share of first-time homebuyers has risen steadily throughout the year: 42.1 percent in January, 43.8 percent in February, 45.1 percent in March and 48.7 percent in April. The figure remained elevated at 48.5 percent in May, even after the suspension of the capital gains tax surcharge on multi-home owners expired. The government's decision to allow non-homeowners to purchase tenanted properties — a measure aimed at preventing listings from being locked up within land transaction permit zones — contributed to the trend.

According to a government announcement last month, non-homeowners accounted for 73 percent of buyers of Seoul apartments sold by multi-home owners, based on data collected as of April 22, up from 56.1 percent a year earlier.

Buyers in their 30s were particularly active. Their share rose from an average of 49.8 percent last year to 56.1 percent through May this year — the first time the age group has accounted for a majority on record.

The first-time buyer trend is also playing out along Gyeonggi Province's semiconductor belt. In Dongtan, the number of collective building buyers reached 1,305 in May alone, continuing a steady climb from 492 in January, 695 in February, 607 in March and 709 in April.

Dongtan has drawn buyers partly because it falls outside land transaction permit zones and regulated areas designated as speculative overheating districts or adjustment target zones. News of performance bonuses worth hundreds of millions of won from major semiconductor firms including Samsung Electronics and SK Hynix, which began circulating in April, has also sustained demand from high-income young buyers. Among first-time buyers in Dongtan last month, those in their 20s and 30s numbered 830, accounting for 64 percent of the total.

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