Seoul's housing market, one of the most unaffordable in the world, has begun to show signs that its red-hot five-year boom could be running out of steam - just in time for the March presidential vote.
Housing is one of the biggest issues in the neck-and-neck election, with prices in the capital having doubled since 2017 when President Moon Jae-in first took office, leaving many millennials facing a lifetime of financial insecurity.
An average apartment in Seoul, for instance, is estimated to cost around 18 years of South Korea's median annual household income, up from 11 years in 2017.
Recent data, however, has lent weight to the view that restrictions on loans, hikes in interest rates and pledges to massively boost the supply of homes by both presidential candidates have begun to have an effect.
South Korean residential property transactions plunged 62% in December to 53,774 from a year earlier - the smallest number for the month since 2008 when the market was battered by the global financial crisis.
Additionally, a weekly index for Seoul's apartment price growth edged 0.1% lower for the last week of January, the first decline in 20 months.
Analysts also note that there's been a natural lull in activity as people wait to see if the March 9 election will bring about changes to capital gains taxes and other levies.
"Loan restrictions and higher borrowing costs began to really cool the market towards the end of last year and even serious buyers and sellers are waiting for policy changes so we're in for a quiet market for months to come," said Yeo Kyoung-hui, a property market analyst at Real Estate 114.
"It's possible that we will see supply outpace demand going forward."
A narrow majority, 51%, of some 500 property market experts expect South Korean home prices to decline this year, according to a survey by the Korea Development Institute in January. Around 30% see further price gains while the rest either expect no change or a year of both price increases and falls.
"A sharp downturn is unlikely, but it does look like the market has turned a corner with interest rates set to rise further," said Park Hab-soo, a professor of real estate studies at Konkuk University.
The election will pit Lee Jae-myung, chosen by the Democrats to succeed Moon, against Yoon Suk-yeol from the conservative People Power Party. Recent polls show they both have 35% of voter support.
Lee has sought to distance himself from Moon's property market policy failures and has pledged to build about 2.5 million homes through public housing.
Yoon has made a similar pledge and has also promised to loosen curbs for first-time buyers so they can borrow up to 80% of a home's value. That compares with a current cap of 40% for those in the capital region.
(Reporting by Cynthia Kim; Editing by Edwina Gibbs)
