Loan Squeeze Drives "Parental Support" Surge in Nodogang and Geumgangu... Share of Gifted Funds Doubles

Gifted and Inherited Funds Now Account for a Larger Share of Home Purchases

'Nodogang' Districts Reach 4.8% in the First Half of This Year, Twice Last Year’s 2.0%

Trend Spreads from the Three Gangnam Districts Across All of Seoul

It has been found that in regions packed with mid- to low-priced housing in Seoul—such as Nowon, Dobong, Gangbuk, Geumcheon, Gwanak, and Guro—the purchase of homes funded by gifted or inherited money has risen significantly. Previously, the use of gifts and inheritances as home purchase funds was notable in areas dense with high-priced housing, such as the three Gangnam districts and Yongsan, which face strict lending restrictions. However, this phenomenon has now also spread to the other 21 districts across Seoul. Analysts point to the rise in the proportion of gifted and inherited funds for home purchases as a result of stricter lending conditions since the second half of last year, when all of Seoul was designated as a regulated area (Adjustment Regions and Speculative Overheating Zones), making loans increasingly difficult to obtain.

According to an analysis by The Asia Business Daily of home purchase funding plans obtained through the office of Assemblyman Lee Jongwook of the People Power Party on July 29, a total of 3.6646 trillion won was used to purchase homes in Seoul with gifted or inherited funds from parents and others in the first half of this year (January–June). This accounts for 6.4% of the total reported home purchase funds in Seoul, which reached 57.2486 trillion won in the same period, marking an increase of 2.8 percentage points from the 3.6% recorded during the same period last year.

The proportion of gifted or inherited funds among total home purchase funds in Nowon, Dobong, and Gangbuk (“Nodogang”) rose from 2.0% in the first half of last year to 4.8% this year—an increase of 2.8 percentage points. Geumcheon, Gwanak, and Guro (“Geumgangu”) also saw an increase from 2.6% to 5.5%, up 2.9 percentage points. It is believed that as lending limits have tightened, buyers have increasingly resorted to gifts and inheritances to make up their shortfall, a trend that has spread to the outskirts.

The number of reported sales including inheritance and gift funds has also increased noticeably. In Geumcheon District, the share of home purchase filings including inheritance or gift funds rose from 12% in the first half of last year to 19.3% in the same period this year. In Dobong, this share increased from 10.8% to 18.8%, and in Jongno, from 12.0% to 17.5%.

After the October 15th policy last year, which designated all of Seoul as both a regulated area and a land transaction permission zone, the requirement to submit funding plans was extended to all home purchases, including transactions below 600 million won. As a result, the proportion of buyers leveraging ‘parental support’ has increased markedly after the implementation of tighter lending regulations.

In the three Gangnam districts and Yongsan, which are dense with high-priced homes, transactions using gifted or inherited funds have also increased. In the first half of this year, out of 9,806 funding plan filings in these four districts, 3,146—or 32.1%—listed gifted or inherited funds. This is up 8.76 percentage points from 23.3% in the first half of last year, meaning that one out of every three purchases now involves such funds.

Assemblyman Lee Jongwook stated, "As the government indiscriminately shuts off access to loans, genuine home seekers lacking private funds are being pushed out of the market, leaving only those who can tap into family wealth to purchase homes—the so-called ‘parental support’ market is spreading. Rather than treating all demand as speculation and cutting off loans indiscriminately, the government should ensure reasonable financial accessibility for genuine buyers, such as first-time buyers, young people, and newlyweds, to create a market in which they can own homes.”

This content was produced with the assistance of AI translation services.