Korea’s home market sinks 32% on month in April amid virus pall

2020.05.19 15:16:21 | 2020.05.19 15:23:51

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The slump in housing market in South Korea deepened in April amid a broad pall from coronavirus outbreak.

The number of home transactions in April came to 73,531, down 32.3 percent compared to previous month, according to the Ministry of Land, Infrastructure and Transport on Tuesday.

The volume is up 28.9 percent from the same month a year earlier when the local real estate market cooled down rapidly after a series of government regulations were launched to fight speculative housing bubble.

The home transactions in and around Seoul, South Korea’s capital, totaled 36,852, down 43.3 percent on month but gained 45.3 percent on year.

The house sales in Seoul came to 9,452 in April, down 42. 1 percent compared to a month earlier.

The fall was slower for regions outside metropolitan Seoul. Regional home sales totaled 36,679, down 15.9 percent. Against a year earlier, it rose 15.9 percent.

The sharp monthly fall in housing sales in April was mainly due to government’s stricter housing market regulations and demand cooled under virus influence, said a market expert.

By housing type, the number of apartment sale transactions came to 48,972 in April, down 38.5 percent from a month earlier. Transactions of houses other than apartment were down 15.5 percent on month to 24,559.

Lease transactions, including jeonse (long-term lease) and monthly rent, totaled 17,216. It was down 14.8 percent compared to the previous month but up 5.2 percent against a year-ago period. The monthly rent accounted for 40.8 percent of total lease transactions in April, rising from 40.7 percent in March and 40.3 percent a year earlier.

Jeonse transactions totaled 10,710 in April, down 15.0 percent on month but up 4.4 percent on year. The number of monthly rent contracts reached 69,506, down 14.5 percent on month but up 6.5 percent on year.

Jeonse is a home rental arrangement unique to Korea, whereby tenant pays a large lump-sum deposit instead of monthly rent, and landlord returns the deposit when lease contract ends.

By Cho Jeehyun

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