Some 15 percent of people who bought expensive homes in Seoul were cash buyers without a mortgage or other housing loan.
Although the government is tightening lending on purchases of homes priced at over W900 million, which is slightly lower than the average price in the capital, those with ready cash can shop freely. That means even if the curbs are partly effective in preventing real estate speculation, that applies only to people who have to borrow.
According to data from the Ministry of Land, Infrastructure and Transport, 8,877 out of 59,591 home sales over W900 million from 2018 to this August were paid for in cash. The source of the money included cash, stocks and calling in debts.
The proportion of cash transactions rose from 13.3 percent in 2018 to 15 percent in 2019 and 16.8 percent this year.
The Hill high-end compound in Hannam-dong in Seoul’s Yongsan district had the highest percentage of cash transactions with 41 cases and an average sales price of an eye-watering W3.37 billion.
The most recent sale of a 59-sq.m unit there was W2.25 billion, while a 243-sq.m unit sold for W7.75 billion last month. Fourteen cash buyers also bought upscale apartments in Songpa, Jamsil and nearby areas, all of them south of the Han River.
“Tougher curbs on lending have made it almost impossible for young people to buy their first home in Seoul. But a few cash-rich people are unaffected by the measures and continue to buy expensive apartments,” said Minjoo Party lawmaker So Byung-hoon.” The government needs to relax lending rules and expand financial assistance so that young people’s dream of buying their first home is not thwarted.”
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