Unclosing Bid-Ask Spread... Seoul Apartment Listings Accumulate

Seoul Apartment Sale Listings Surge Nearly 20% in a Month
Average Sale Price 1.2 Billion Won... Villa Sales Increase Amid Transaction Freeze

On the 5th, a view of the residential area in Songpa-gu, Seoul, as seen from the 'Seoul Sky' observatory at Lotte World Tower in Jamsil, Songpa-gu, Seoul

As the apartment transaction freeze continues in the Seoul metropolitan area, the total number of apartment listings (sales, jeonse, and monthly rent) in Seoul has surpassed 90,000 units.

This is the first time since last August, when the government strengthened regulations against false real estate listings and the bubble was deflated, that the total number of listings has exceeded 90,000 units. This is interpreted as a result of weakened buying demand due to soaring apartment prices and loan regulations. However, despite the increase in listings, the average apartment sale price in Seoul continues to rise, exceeding 1.2 billion KRW, leading demand to shift toward relatively affordable villas.

◇Accumulating sales listings... a 20% surge in one month= According to the real estate information platform Asil on the 25th, as of the 23rd, the total number of apartment listings in Seoul reached 90,168 units. This comes about a year after the total listings bottomed out at around 50,000 units due to regulations on false listings. Notably, the increase in sales listings stands out. The number of listings rose from 36,949 units on the 23rd of last month to 44,275 units on the 23rd of this month, a sharp 19.8% increase in just one month. Particularly, districts that have recently led apartment price increases such as Yongsan-gu (24.4%), Gwangjin-gu (24.3%), Gangseo-gu (23.5%), and Nowon-gu (22.1%) show prominent growth.

It appears that listings are accumulating as buying becomes difficult due to both soaring prices and loan restrictions. The cumulative increase rate of Seoul apartment prices until last month this year was 6.24%, more than double last year's 3.01%. Since entering the 40,000-unit range in October, the number of apartment sales listings in Seoul has steadily increased and is approaching the 45,000-unit mark.

The sales supply-demand index has also been declining for six consecutive weeks. According to the Korea Real Estate Board's announcement last week, Seoul's apartment sales supply-demand index (as of the 18th) was 101.6, down 0.3 points from the previous week (101.9). The sales supply-demand index is based on 100, with values closer to 200 indicating demand exceeds supply. In private indices, a 'buyer-favored' market has formed. According to the weekly trend released by KB Kookmin Bank's Liv Real Estate, Seoul's buyer dominance index (as of the 18th) was 86.1, down 8.4 points from the previous week (94.5), marking the third consecutive week of a buyer-favored market.

◇Demand shifts to villas amid insurmountable apartment prices rising by 200 million KRW in one year= However, the price increase trend remains strong. According to KB Kookmin Bank's monthly housing price trend time series statistics, the average apartment sale price in Seoul in October was 1,216.39 million KRW.

After surpassing 1 billion KRW in September last year, the price broke 1.1 billion KRW in April this year, seven months later, and rose by another 100 million KRW six months after that. Since the beginning of this year, the average apartment price in Seoul has increased by 173.4 million KRW, and compared to October last year, it has risen by 206.68 million KRW.

Demand is increasing for relatively affordable villas (multi-family and row houses) due to the high prices. The reversal of sales volume between villas and apartments, which began in earnest from the start of the year, has continued for ten months.

According to the Seoul Real Estate Information Plaza, until December last year, apartments had 7,541 transactions and villas had 5,506, but in January this year, the numbers reversed to 5,797 and 5,845 respectively. This trend has continued, and as of this month, villa transactions total 1,410 units, more than twice the apartment sales of 643 units. An industry insider said, "With signs of redevelopment being revitalized due to deregulation, villa transaction volumes may increase further."

As demand shifts to villas, the price increase rate is also expanding. According to KB Liv Real Estate's monthly housing price trends, villa sale prices in Seoul rose 1.43% compared to the previous month this month, marking a two-month consecutive increase of over 1%. The cumulative increase rate of Seoul villa sale prices from January to September this year was 6.21%, nearly double last year's 3.15% for the same period. The median sale price of row houses in Seoul exceeded 300 million KRW for the first time this month, reaching 306.1 million KRW. The median price refers to the middle price when housing prices are arranged in order and is also called the 'middle price.'

Ye Kyung-hee, senior researcher at Real Estate R114, said, "In the past, villa transactions were often made with redevelopment in mind, but recently, the number of actual end-users has increased significantly. We understand that actual end-users who need to live in Seoul and buyers considering purchase amid the moving season's jeonse demand are buying many villas."