Seoul Housing Price Increase Rate Drops to 0% Range After 6 Months... Decline in Sale Prices Expected to Outpace Rise

Monthly Sales Price Increase Rate 0.73%
KB Real Estate Housing Price Outlook Index 94... Below 100 for the First Time in 18 Months

Apartment buildings in the Seoul area (Photo by Yonhap News)

[Asia Economy Reporter Ryu Taemin] The monthly housing price increase rate in Seoul's districts has fallen to the 0% range for the first time in six months. In particular, the outlook that Seoul housing prices will decline in 2 to 3 months is more dominant than the expectation of a price increase.

According to the monthly KB Housing Market Trend released by KB Real Estate on the 29th, the November housing sales price increase rate in Seoul recorded 0.73% as of the 15th, a 0.37 percentage point decrease from 1.10% in the previous month. This is the first time in six months since May that the sales price increase rate in Seoul has fallen below 1%.

By region, Gangbuk-gu was the lowest at 0.19%, and Seodaemun-gu (0.20%) and Eunpyeong-gu (0.24%) also showed signs of stabilizing. However, Seocho (1.25%), Gangnam (1.24%), Nowon (1.18%), and Gangseo (1.06%) continued to maintain an increase rate above 1%.

By housing type, the increase rate for townhouses sharply slowed from 1.43% last month to 0.35%. On the other hand, apartments saw a slight increase from 1.05% to 1.06%.

This month, the overall housing price increase rate in the metropolitan area also slowed to 1.11% from 1.27% last month. Incheon (1.54%) saw a decrease in the increase rate compared to the previous month (1.78%), while Gyeonggi Province remained similar at 1.28% compared to 1.27% last month. In Gyeonggi this month, ▲Ilsanseo-gu (2.21%), ▲Ansansangnok-gu (2.01%), and ▲Icheon (2.00%) showed high increase rates in the 2% range.

The outlook for housing price declines is also expanding. This month, Seoul's housing sales price outlook index recorded 94, significantly down from 113 last month. This is the first time in 18 months since May last year that it has fallen below the baseline of 100. The KB Real Estate price outlook index surveys over 4,000 brokerage offices nationwide about housing price expectations 2 to 3 months ahead. The range is 0 to 200, and an index below the baseline of 100 indicates a higher proportion of expectations for price declines.

Song Seunghyun, CEO of Urban and Economy, explained, “As housing prices continue to rise, buyers' price fatigue accumulates, and expectations for further increases have diminished due to loan regulations and interest rate hikes. Also, with the presidential election next year, a wait-and-see attitude has continued, leading to reduced transactions.”