KB's Seoul apartment buyer index sheds 17.5 points from its July peak

KB Real Estate builds its buyer-superiority index from surveys of local brokerages on a scale of 0 to 200, and a reading above 100 means buyers outnumber sellers ^[1]. Seoul's July peak of 89.2 ^[3] was already under that line, so even at the top of this summer's run the survey never showed buyers in the majority ^[8].

Split at the Han River, the city's two halves lost almost the same number of points. The 11 southern districts went from 82.1 in mid-July to 64.4 at the end of September, a drop of 17.7 ^[4][1]. The 14 northern districts went from 97.2 to 79.9, a drop of 17.3 ^[6][2]. As a share of the starting level, Gangnam's fall is larger, about 22% against 18% ^[3], and it finishes lowest.

The bigger gap between the two halves is in prices. Gangnam's weekly gain shrank from 0.27% in July to 0.07% ^[10], a slowdown of about three quarters ^[4], while the north's eased from 0.43% to 0.26%, or about 40% ^[11][5]. Neither figure is negative. Multiplied across 52 weeks, Seoul's latest weekly gain of 0.16% is a simple annual pace of about 8.3%, against roughly 17.7% at mid-July's 0.34% ^[9][6]. Gangnam's 0.07% works out to about 3.6% a year on the same basis ^[7], and the city's price index was still climbing at 109.7 last week ^[12]. On KB's numbers Gangnam is slowing fastest, and its prices still rise week on week ^[10].

Sedaily's account names two pressures, and they fall on different people. The Aug. 3 package raises holding taxes on expensive homes and trims tax benefits for long-term owners ^[13]. Analysts quoted by Sedaily also cite higher benchmark and mortgage rates, with US Treasury yields above 5% ^[14], arriving after a year of strict mortgage rules has limited what buyers can borrow ^[15]. A tax aimed at expensive homes and Gangnam reconstruction complexes does not obviously explain a 17.3-point fall in the north ^[2]. Rates and mortgage limits are the likelier common cause.

Buyers who can wait have reason to. An official at a brokerage in Seongbuk District said demand for apartments under 1.5 billion won "is still strong because the shortage of rental housing in Seoul is severe" ^[16]. The same official said: "Even among those waiting to buy, more are thinking that waiting a bit rather than buying right now may be the cheaper path to owning a home." ^[17]

Prices could keep edging up on thin trading, leaving the sentiment drop as a pause. Gangnam could tip into declines first, since it has the least gain left above zero. Or lower Treasury yields could ease the rate pressure while the tax stays. I think Gangnam turns first, because it takes the tax directly ^[13] and has the smallest weekly gain left ^[10]. The view is wrong if Gangnam's weekly change is still positive when the buyer index stops falling.