The government has interpreted recent downward trends in apartment prices in Gangnam's two districts (Seocho and Gangnam) and improvements in leading housing supply indicators as positive signs of housing market stabilization, expressing optimism over the possibility of mid- to long-term market stability.

In a press release issued on October 18, the Ministry of Land, Infrastructure and Transport stated that following the implementation of public-private housing supply measures such as the September 7 housing supply expansion plan last year and the August 13 swift housing supply plan this year, alongside demand management measures including the October 15 housing market stabilization plan last year, leading housing supply indicators are improving and some downward stabilization indicators are emerging.

Regarding building permits, a leading supply indicator, the Ministry explained that Seoul's performance over the past six months (March to August) reached 36,000 households, a 74% increase compared to the same period last year, exceeding the long-term average (28,000 households) for 2016 to 2025.

Housing construction starts in Seoul over the past six months stood at 17,000 households; while lower than the long-term average (31,000 households), this represents a 45% increase compared to the same period last year.

In terms of market trends, sale prices in Gangnam and Seocho districts have fallen for 10 consecutive weeks while Seoul's overall sale price growth rate has slowed since July. Apartment transaction volumes in Seoul have generally decreased since May, and current listings for sale have increased by about 30% to approximately 74,000 units compared to the beginning of the year, the Ministry noted.

Regarding market sentiment, the Ministry emphasized that Seoul's housing sales market consumer sentiment index has been on a downward trend since July due to factors such as falling prices in key areas and rising interest rates, indicating a phase where overheated sentiment is cooling down.

The Ministry noted that in the short term, upward factors—such as a decrease in move-in volumes, rising national income, expanded purchasing power driven by a booming semiconductor and other industries, and expectations of rising home prices—are mixed with downward factors, including benchmark interest rate hikes and rising mortgage rates, requiring close monitoring of market conditions.

However, from a mid- to long-term perspective, the Ministry projected that supply conditions will improve significantly starting in 2028 when move-ins for the 3rd-generation new towns begin in earnest, as the results of supply measures gradually materialize with increases in permits and construction starts in both public and private sectors.

Additional factors cited for mid-to-long-term stabilization include the sharp slowdown in Seoul's household growth rate from 2.20% in 2020 to 0.83% last year, with the possibility of turning downward after 2038, alongside the full-fledged pursuit of balanced national development policies such as the "five-pole, three-special" strategy and the second wave of public institution relocations, which will disperse housing demand from Seoul and the capital region to local areas.

The Ministry explained that the decline in jeonse and wolse (lease and monthly rent) listings—one of the key pending issues in the real estate market—is a trend that has appeared since 2024 and is not a problem limited to land transaction permission zones in Seoul and the capital area, but rather a nationwide phenomenon driven by supply shortages.

Furthermore, the Ministry analyzed that the primary cause of the decrease in lease and monthly rent listings is the sharp drop in move-in volumes that began in earnest last year, acting as a source of supply-demand instability particularly in the capital region where the housing supply ratio is below 100%.

The Ministry emphasized, "We will continue to closely monitor market conditions while making every effort to ensure public housing stability by timely responding to market situations, maximizing stabilization factors such as supply expansion, and minimizing destabilizing factors."