Real Estate 114 "Limitations as a Catalyst for Base Rate Cut"
[Asia Economy Reporter Kim Yuri] The Seoul apartment prices, which had been declining since March, have turned upward after 9 weeks. Due to the sale of quick-sale properties for tax-saving purposes, signs of recovery are being detected mainly in some complexes in the Gangnam area. The decline in Gangnam has slowed, and Seocho has remained stable. Songpa saw a reversal to an increase as asking prices rose in Jamsil-dong Jugong Complex 5, Lake Palace, and Jamsil Els. However, after the quick-sale properties were absorbed and asking prices rose, the chasing buying demand has remained subdued.
According to Real Estate 114 on the 29th, this week Seoul apartment sale prices rose by 0.01%. Both reconstruction apartments and general apartments increased by 0.01% and 0.02%, respectively, turning upward. In addition, Gyeonggi and Incheon rose by 0.05%, and new towns increased by 0.01%.
In Seoul, quick-sale properties released for tax-saving purposes were traded mainly in the Gangnam area, resulting in Gangnam recording a smaller decline of -0.03% compared to last week (-0.06%). Gangdong (0.02%), Songpa (0.02%), and Seocho (0.00%) either turned upward or remained stable. The areas that declined this week were Gangnam (-0.03%) and Gwangjin (-0.02%). In Gangnam, Samsung Hills State Complex 2 in Samseong-dong, Gaepo Woosung 1st Complex in Daechi-dong, and Gaepo Woosung 7th Complex in Irwon-dong fell by 10 million to 50 million KRW. In Gwangjin, Gwangjang Hyundai Complex 8 in Gwangjang-dong dropped by about 10 million KRW. On the other hand, areas with a shortage of new apartment supply or relatively undervalued areas such as Jongno (0.13%), Gangbuk (0.12%), Seongbuk (0.11%), Nowon (0.09%), and Geumcheon (0.09%) rose. In Jongno, Kyunghuigung Xi Complexes 2 and 4 in Hongpa-dong (Gyobuk-dong) increased by 5 million to 20 million KRW, and in Gangbuk, Raemian Tribera Complexes 1 and 2 in Mia-dong rose by 5 million to 10 million KRW.
In new towns, Jungdong (0.04%), Ilsan (0.02%), Sanbon (0.02%), Bundang (0.01%), Pyeongchon (0.01%), and Wirye (0.01%) rose, while other new towns remained stable. In Jungdong, Sangdong Hanarum Life, Hyundai and Hanarum Samhwan, and Jungdong Geumgang Jugong increased by 5 million to 10 million KRW. In Ilsan, Juyop-dong Moonchon Complex 2 Life and Moonchon Complex 17 Shinan rose by 5 million to 10 million KRW.
Gyeonggi and Incheon continued to rise mainly in the southern Gyeonggi area. By region, Osan (0.17%), Bucheon (0.13%), Ansan (0.13%), Gunpo (0.11%), Hwaseong (0.09%), Gwangmyeong (0.08%), and Hanam (0.08%) increased. On the other hand, Gwacheon (-0.12%), Gwangju (-0.01%), and Icheon (-0.01%) declined. In Gwacheon, the decline was significant due to the weakening buying demand and the move-in of the large-scale complex Gwacheon Prugio Summit (1,571 households) in April.
The metropolitan area jeonse (long-term lease) market remains relatively stable. Jeonse prices rose by 0.02% in Seoul, and by 0.03% and 0.02% in Gyeonggi·Incheon and new towns, respectively.
In Seoul's jeonse market, Seongbuk (0.07%), Gangseo (0.06%), Dobong (0.06%), Gangdong (0.05%), Guro (0.05%), Dongdaemun (0.04%), and Songpa (0.04%) increased. In Seongbuk, Jongam-dong Jongam Complex 2 IPARK, Hawolgok-dong Wolgok Doosan We've, and Donam-dong Donam The Sharp rose by 5 million to 10 million KRW. In Gangseo, Hwagog-dong Ujangsan Lotte Castle, Yeomchang-dong Donga Complex 1, and Banghwa-dong Magok Gyeongnam Honorsville increased by 5 million to 20 million KRW. In Dobong, Banghak-dong Sindonga Complex 1, Chang-dong Sangye Jugong Complex 19, and Ssangmun-dong Geukdong rose by 2.5 million to 5 million KRW.
In new towns, Dongtan (0.05%), Ilsan (0.04%), Sanbon (0.03%), and Bundang (0.02%) rose, while other new towns remained stable. In Gyeonggi·Incheon, Namyangju (0.08%), Ansan (0.06%), Hanam (0.06%), Osan (0.06%), Pyeongtaek (0.06%), Gwangmyeong (0.05%), and Bucheon (0.05%) increased. Gwacheon fell by 0.32% due to the move-in effect of Gwacheon Prugio Summit.
Lim Byung-chul, Senior Researcher at Real Estate 114, said, "Although quick-sale properties were traded mainly in the Gangnam area, concerns about further decline remain, so it is not leading to chasing buying demand." He added, "The Bank of Korea held a Monetary Policy Committee meeting and lowered the base interest rate to a historic low of 0.5% per annum, but economic uncertainties due to COVID-19 remain, and since the rate was already ultra-low, the impact of further cuts is expected to be limited." However, he predicted that the upward trend would continue for the time being in areas with many mid-to-low-priced apartments and relatively less price increase in non-regulated areas.
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