Gradual Increase in Sales and Jeonse Listings
Jeonse Price Ratio Falls for the First Time in 6 Months
The rise in apartment prices in the Seoul area has slowed for three consecutive weeks. According to Real Estate 114 on the 5th, the apartment sale price in Seoul increased by 0.13%, with the rate of increase shrinking by 0.01 percentage points (p) compared to the previous week.
The photo shows apartments viewed from the observatory of 63 Building in Yeongdeungpo-gu, Seoul, on the 7th.
The number of apartment sales and jeonse/monthly rental listings in the Seoul area has recovered to the 80,000 range after about 200 days. This is analyzed to be due to the accumulation of listings as buying demand slowed down amid the government's announcement of the 2·4 supply plan and the designation of the Gwangmyeong-Siheung district as a new town, along with the waiting demand for pre-sale of apartments. However, there are concerns that the market could be shaken again if the supply of new towns is disrupted due to the land speculation scandal involving employees of the Korea Land and Housing Corporation (LH).
According to Apartment Real Transaction Price (Asil), a real estate big data company, the total number of sales and jeonse/monthly rental listings in Seoul reached 80,259 as of the 8th. It is the first time in 199 days since August 21 last year (85,821 listings) that the total number of listings exceeded 80,000.
The number of apartment listings in Seoul maintained a level of 140,000 to 150,000 until the first half of last year but sharply declined after August. This was due to the enforcement of the revised Real Estate Agent Act, which imposes fines of up to 5 million won on real estate agents who post false or exaggerated listings online. After hitting a bottom of 53,828 listings in October, the number gradually increased, reaching 60,000 in October and recovering to 70,000 in November. The listings, which had remained in the 70,000 range, surpassed 80,000 in March, the month following the announcement of the 2·4 plan.
In the market, the buying demand has slowed, and jeonse listings have slightly increased, indicating that the previously strong seller's market is also showing signs of weakening. According to KB Kookmin Bank's Live On, as of the 1st of this month, Seoul's apartment buyer dominance index recorded 96.2. This is a decrease of 4.8 points from last week (101.0), marking the first time in three months since November 30 last year that the index fell below 100. An index above 100 indicates more buyers, while below 100 indicates more sellers.
The soaring jeonse prices have also shown signs of slowing. According to KB Kookmin Bank's housing price trend time series statistics, Seoul apartment jeonse price ratio was 56.17% last month, down 0.09 percentage points from the previous month (56.26%). This is the first decline after five consecutive months of increase from August last year (53.27%), right after the implementation of the new lease law (contract renewal request system and jeonse/monthly rent cap) at the end of July last year, until January this year (56.26%).
However, experts observe that it is still uncertain whether this trend will continue. This is due to the emergence of speculation allegations involving LH employees in the Gwangmyeong-Siheung district. The government plans to proceed with the pre-sale of the 3rd new town in July as scheduled, but it cannot rule out the possibility of delays depending on the investigation results. Some suggest that if the government fails to resolve market distrust through the new town speculation investigation, there is a possibility of a complete stop in the pre-sale schedule. In such a case, the waiting buyers who had been observing the market might actively return to buying.
Seo Jin-hyung, president of the Korea Real Estate Society and professor at Gyeongin Women's University, said, "Losing public trust due to speculation allegations is a fatal problem in a situation where public-led supply is emphasized," adding, "Once the investigation starts, the compensation process will face difficulties, and the schedule will inevitably be delayed."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
