"Price Cuts of 200 Million KRW Emerge"...Only Sejong Housing Prices Show Decline

6 Consecutive Weeks of Negative Sales Price Index Change Rate
Market Rapidly Contracts Due to Last Year's Administrative Capital Relocation Discussions and Exhaustion from Price Surge
Followed by a Bombardment of Housing Supply

[Asia Economy Reporter Onyu Lim] While apartment prices in major metropolitan cities across the provinces are soaring to unprecedented heights, Sejong City is showing the exact opposite trend.

Prices have been declining for six consecutive weeks, with cases of transactions occurring at prices more than 200 million KRW lower than the peak prices becoming frequent. This reflects market fatigue following last year's rapid price surge and a sharp contraction due to large-scale move-ins.

According to the Korea Real Estate Board on the 3rd, the apartment sale price in Sejong City in the last week of August fell by 0.01% compared to the previous week. Since turning to a downward trend (-0.09%) in the third week of July, it has recorded negative changes for six consecutive weeks.

Among the 17 metropolitan cities and provinces nationwide, Sejong City is the only area where housing prices have declined. Most areas, including Sodam, Boram, and Dajeong-dong, have continued to show either stable or declining trends.

Sejong City, which recorded the highest nationwide price increase last year (44.93%), has been showing a clear downward trend since the second half of the year.

In particular, price declines are more pronounced in medium- to large-sized apartments. For example, a 106.6㎡ (exclusive area) unit in Dodam-dong Doremaeul Complex 9, which traded for 1.445 billion KRW as of June, was sold for 1.17 billion KRW on the 11th of last month. This represents a sharp drop of 275 million KRW in just two months. Nearby, a 99.9㎡ unit in Doremaeul Complex 14 was traded for 1.05 billion KRW last month, which is also 230 million KRW lower than the record high of 1.28 billion KRW set in October last year.

Although the decline is relatively smaller, prices of small- to medium-sized apartments are also weak. For instance, an 84.9㎡ unit in Saerom-dong Saetteummaeul Complex 1, which was traded for 930 million KRW in February, was reported at 845 million KRW last month.

A representative from a local real estate agency in the area explained, "As the price adjustment period for apartments in Sejong City lengthens, the number of units with asking prices lowered by more than 100 million KRW is increasing."

The weakness in Sejong City's housing prices is analyzed to be largely due to fatigue from the short-term rapid price surge. The increase in move-in volume from 4,062 households last year to 7,668 households this year also appears to have had an impact. In Sejong City, 1,031 households in Naseong-dong Hanshin The Hue Reserve began move-ins in August, followed by Jeil Punggyeongchae Winnersky (771 households) this month, and Saenaru Maeul Complex 1 in Jiphyeon-dong (1,200 households) is scheduled for completion in October.

Listings are also increasing. According to Apartment Real Transaction Data, a real estate big data company, apartment listings in Sejong City have increased by nearly 10%, from 3,763 to 4,127 units over three months. Additionally, the Ministry of Land, Infrastructure and Transport has announced plans to develop new public housing sites with 6,000 households in Yeongi-myeon and 7,000 households in Jochiwon-eup as follow-up measures to the 2·4 housing plan, leading industry experts to predict that housing prices are likely to remain weak for the time being.