Seoul Home Sales: Apartments Rise to 58.5% Despite Regulations & Supply Concerns

Seoul’s apartment market continues to defy expectations, accounting for 58.5% of all housing transactions in February, according to data released by the Ministry of Land, Infrastructure and Transport. This marks a rebound from a low of 46.4% in November of last year, a period impacted by stricter lending regulations and land transaction restrictions.

The resilience of the apartment sector, even as Seoul aims to encourage a shift towards owner-occupancy, highlights a persistent preference for newly constructed homes and a widespread belief that the city’s housing supply shortage won’t be quickly resolved. The February figure represents a 7.8 percentage point increase from the previous month.

The rebound follows the implementation of the “10·15” policy measures in late 2023, which tightened loan-to-value (LTV) ratios for first-time and single-home buyers, and introduced price-based caps on mortgage amounts. In regulated areas, the LTV was reduced from 70% to 40% for eligible buyers, with maximum loan amounts ranging from 600 million to 200 million won depending on property value. The measures also imposed a two-year residency requirement for apartment purchases in areas designated as land transaction permission zones, effectively curbing speculative investment.

Despite these restrictions, the apartment share has recovered, fueled in part by expectations of future price increases. Last year, Seoul’s overall housing price index rose 7.07%, with apartments outperforming at 8.98%. This suggests that, despite regulatory headwinds, apartments are still perceived as a relatively safe and potentially lucrative investment.

Further contributing to the renewed interest is the impending implementation of increased capital gains taxes on multiple homeowners starting May 9th. This has prompted some investors to sell properties before the new rules take effect, adding to the supply of apartments on the market and potentially influencing transaction volumes.

However, the fundamental issue remains a lack of supply. Data from the real estate research firm, 부동산R114, indicates that only 57,010 new apartments are expected to enter the Seoul market between 2026 and 2029. This represents an average of 14,253 units per year, significantly lower than the average of 32,494 units added annually between 2022 and 2025.

This supply constraint is particularly pronounced for newer, more desirable apartments. As of November 2025, the average selling price for apartments less than five years old was 1.85144 billion won, approximately 600 million won higher than that of older properties (over 10 years old), which averaged 1.26984 billion won.

Shinhan Bank’s real estate investment advisory center team leader, Kwon Young-sun, noted that even in the outskirts of Seoul, new apartments are frequently selling at record prices. “Given the genuine shortage of apartment supply, we anticipate continued price appreciation for new apartments due to their scarcity,” Kwon said.

The continued dominance of apartments in Seoul’s housing market underscores the challenges facing policymakers attempting to moderate prices and promote a more balanced housing landscape. While regulations aim to curb speculation and encourage owner-occupancy, the underlying demand for new apartments, coupled with limited supply, continues to drive market dynamics. The coming months will be crucial in determining whether the current trend of rising apartment transactions and prices will persist, or whether further policy interventions will be necessary to achieve greater stability.