Buying Sentiment Declines for 6th Week... Seoul Apartment Prices Rise 0.1%

[Asia Economy Reporter Kim Min-young] The buying sentiment for apartments in the Seoul metropolitan area continues to decline. This weakening in buying sentiment appears to be the result of a combination of loan regulations, fatigue over rising housing prices, and increased taxes. However, despite the contraction in buying sentiment, apartment prices in Seoul have continued to rise.

According to the Korea Real Estate Board on the 24th, the apartment sales supply-demand index in Seoul for this week (as of the 18th) was 101.6, down 0.3 points from last week’s 101.9, marking six consecutive weeks of decline. The sales supply-demand index is expressed as a number between 0 and 200, with values above the baseline of 100 indicating strong buying sentiment.

The Real Estate Board explained that the perception that housing prices have reached a peak, along with ongoing household loan volume regulations, seems to have dampened buying sentiment.

The Seoul apartment sales supply-demand index has remained above the baseline of 100 for 28 consecutive weeks from the second week of April to this week. However, since dropping from 107.2 in the first week of last month to 107.1, it has been on a downward trend for six consecutive weeks.

The supply-demand atmosphere in the jeonse market is showing a similar trend. The apartment jeonse supply-demand index in Seoul was 102.3, down 0.6 points from last week. By region, except for the Southwest area (Seonam-gwon) which rose from 102.7 to 103.2, four other regions?Downtown area (Dosim-gwon) (103.2 to 102.7), Northeast area (Dongbuk-gwon) (103.9 to 102.5), Northwest area (Seobuk-gwon) (102.5 to 102.1), and Southeast area (Dongnam-gwon) (101.7 to 100.9)?all declined.

The Real Estate Board analyzed, "In Seoul, although the number of listings has somewhat increased due to the high burden of jeonse prices, the jeonse price rise continues mainly in areas near subway stations and good school districts, as well as in mid-to-low price areas, driven by last-minute moving demand in the autumn season."

Private research institution KB Kookmin Bank’s Liv Real Estate statistics also show weakening buying sentiment. The metropolitan area’s buying dominance index recorded 91.5 as of the 18th, down 0.1 points from last week’s 100.6. A buying dominance index below 100 indicates that there are more sellers than buyers in the market.

Despite the contraction in buying sentiment, apartment prices in Seoul continue to rise. According to the weekly metropolitan apartment market report by Real Estate R114, apartment prices in Seoul rose by 0.10% this week, maintaining the same level as last week. By region, the increases were in the order of Gwanak (0.20%), Gangbuk (0.16%), Gangdong (0.15%), Guro (0.15%), Nowon (0.15%), Gangseo (0.14%), Mapo (0.14%), and Dobong (0.13%).