Weekly Apartment Price Trends by Korea Real Estate Board
Northwest Area Buyer Sentiment Below '0' After 6 Months
Loan Regulation Strengthening Affects Perception of Peak House Prices
Jeonse Index Also Declines... Listings Accumulating
Apartment complexes in Songpa and Gangnam areas as seen from the 'Seoul Sky' observatory at Lotte World Tower, Jamsil, Songpa-gu, Seoul [Image source=Yonhap News]
Apartment purchase sentiment in Seoul has declined for eight consecutive weeks. The northwestern area fell below the baseline (100) for the first time in six months. This means that there are more homeowners wanting to sell than buyers wanting to purchase. Analysts suggest that the market atmosphere is changing as the perception of a 'housing price peak' spreads and loan regulations tighten.
According to the weekly apartment price trend time series data from the Korea Real Estate Board on the 5th, this week's Seoul apartment purchase-supply index was 100.7. This is the lowest figure in about six months since it recorded 100.3 on April 12. It has been showing a continuous downward trend for the past eight weeks.
This index quantifies the balance between demand and supply by analyzing surveys from member real estate agencies and the number of online listings. With 100 as the baseline, a value closer to '0' indicates that supply exceeds demand. Conversely, a value closer to '200' means demand exceeds supply.
Seoul had shown strong buying momentum due to expectations of rising housing prices, but recently, as the perception that housing prices have peaked spreads, buying demand has sharply decreased. The frontline real estate industry explains that the gap between the asking prices set by homeowners and the prices buyers are willing to pay in the actual market has become excessively large, causing transactions to freeze.
In fact, this week, the purchase-supply index in the northwestern area, including Mapo, Seodaemun, and Eunpyeong districts, dropped to 99.8, falling below 100 for the first time since April 26 (98.9). The downtown area, including Jongno and Yongsan districts (100.7), and the southwestern area, including Yeongdeungpo, Yangcheon, Guro, and Dongjak districts (100.6), also saw their purchase-supply indices decline compared to last week. The southeastern area, including Gangnam, Seocho, Songpa, and Gangdong districts, recorded 100.5, slightly up from last week's 100.4, but the heat has somewhat cooled.
The Seoul jeonse (long-term lease) supply-demand index is also showing a downward trend. The jeonse supply-demand index was 101.2, down 1.2 points from last week's 102.4. This is the lowest level in about a year since November 11 last year (100.4). The downtown and southeastern areas fell below the baseline of 100, recording 99.5 and 99.6 respectively. The jeonse prices have also risen excessively, which is interpreted as causing an accumulation of listings in the market.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
