Korea Real Estate Board Weekly Apartment Price Trends for 4th Week of October
Gangnam-gu Land Prices Turn Down Again After 2 Weeks
Seoul Apartment Prices Rise 0.01% for 10 Consecutive Weeks 'Stalling'
Jeonse Market Continues Turmoil...Prices Rise and Listings Scarce
President Moon Jae-in is delivering the 2021 budget address at the National Assembly in Yeouido, Seoul, on the morning of the 28th. (Photo by Yonhap News)
[Asia Economy Reporter Moon Jiwon] Apartment prices in Gangnam-gu, Seoul have turned downward again after two weeks. While demand has decreased mainly in high-priced reconstruction complexes, mid- to low-priced complexes are still showing an upward trend due to a shortage of supply.
Seoul apartment jeonse prices are showing an even more confusing pattern as the rate of increase has actually expanded. Even President Moon Jae-in has stepped in to emphasize 'stabilizing the jeonse market,' but the government has yet to find a proper solution.
According to the 'Weekly Apartment Price Trend for the 4th Week of October' released by the Korea Real Estate Board on the 29th, as of the 26th, apartment prices in Seoul rose by 0.01% compared to the previous week. This marks the 10th consecutive week maintaining a 0.01% increase since the 4th week of August.
In Seoul, only Gangnam-gu (-0.01%) saw apartment prices decline. Gangnam-gu fell by 0.01% in the 2nd week of October, then immediately stabilized the following week, but turned downward again after just one week.
The Korea Real Estate Board explained, "High-priced reconstruction complexes in the Gangnam area generally saw decreased demand and price declines, but other mid- to low-priced complexes rose due to reduced new supply and a shortage of jeonse units."
In fact, Seocho and Gangdong-gu (0.00%), which belong to the Gangnam area, maintained a stable trend, while Songpa-gu (0.01%) saw slight price increases mainly in small-sized units in Pungnap-dong. Gwanak-gu (0.03%), which had the highest rate of increase in Seoul, rose mainly in mid- to low-priced complexes in Sillim and Bongcheon-dong, and Geumcheon and Gangseo-gu (0.02%) also showed upward trends in complexes near subway stations.
Jungnang-gu (0.03%) saw apartment prices rise in large complexes in Muk-dong and older buildings in Sinnae-dong, while Nowon-gu (0.02%) rose mainly in some newly built complexes in Junggye-dong.
In Gyeonggi-do, the apartment price increase rate expanded from 0.14% to 0.16%, influenced by the 'balloon effect' in areas like Gimpo. Gimpo (0.58%) continues its upward trend due to the advantage of being a non-regulated area and expectations of transportation improvements. Market analysts suggest that this area may soon be designated as a regulated zone.
Additionally, Goyang Deogyang-gu (0.35%) saw price increases mainly in subway station areas such as Haengsin and Hwajeong-dong, as well as large complexes in Dongsan and Seongsa-dong. Osan-si (0.34%) rose mainly in mid- to low-priced complexes in Gwol and Osan-dong. Yongin Giheung-gu (0.28%) also saw increases mainly in complexes near the Shinbundang Line subway stations, generally expanding the rate of increase. However, Yeoju-si (-0.04%) continued its downward trend due to an increase in new supply.
Incheon saw steady price increases across all areas, but the rate of increase remained the same as the previous week at 0.12%. Sejong (0.24%), which has the issue of 'administrative capital relocation,' also continues to show a high rate of increase, but the rate of increase slightly decreased compared to last week due to fatigue from rapid price rises and weakened buyer sentiment.
The jeonse market, which has experienced unprecedented confusion since the implementation of the Lease 2 Act, still shows rising prices and a shortage of listings.
Seoul apartment jeonse prices rose 0.10% this week, expanding the increase from 0.08% the previous week. This marks a continuous rise for 70 weeks. In the Gangnam area, a shortage of listings persists overall, with jeonse prices jumping in Songpa-gu (0.19%), Gangnam-gu (0.18%), Seocho-gu (0.16%), and Gangdong-gu (0.16%).
Outside the Gangnam 4 districts, most areas showed high rates of increase, including Dongjak-gu (0.14%), Geumcheon-gu (0.12%), Seongbuk-gu (0.11%), Nowon-gu (0.10%), and Mapo-gu (0.10%).
The Korea Real Estate Board explained, "The shortage of listings continues due to expanded low-interest liquidity, strengthened residency requirements, implementation of the renewal request right, and waiting demand for subscription. Jeonse prices rose mainly in major complexes with good transportation access and school districts."
In Incheon, centered on Yeonsu-gu (0.99%), jeonse prices rose, expanding the rate of increase from 0.39% to 0.48%. Gyeonggi-do rose by 0.24%, the same as the previous week, but jeonse prices are rising significantly in areas such as Suji-gu in Yongin (0.43%), Osan-si (0.40%), and Gwangmyeong-si (0.39%).
Sejong continued its upward trend mainly in Dodam and Saerom-dong within the Happy City, but the rate of increase slightly decreased from 1.26% to 1.24%.
President Moon recently stated in a National Assembly policy speech regarding the spreading jeonse crisis centered in the metropolitan area, "We will definitely stabilize the jeonse market."
Since the jeonse crisis is increasing the suffering of ordinary citizens, which could lead to loss of support base and weakening of national governance momentum, the government intends to resolve the issue through additional measures. The government is expected to push forward the Lease 3 Act as planned, introducing medium-sized public rental housing and equity accumulation-type sale housing to stabilize the market.
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