Incheon, which was soaring to the sky, also follows the trend of 'Palja'... Buy-Sell Index Hits Lowest in 29 Months

Incheon Buyer's Dominance Index at 41.5... Down 15.6 Points from Previous Month
Apartment Listings Accumulate Due to Worsening Buying Sentiment... Increased 75% Over 5 Months
Declining Price Transactions Account for 62.8%... 6 out of 10 Units Sold at Lower Prices

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

[Asia Economy Reporter Ryu Tae-min] As the real estate market freezes nationwide, the heat in the Incheon apartment market, which showed a sharp rise last year, is cooling down significantly. The prolonged fatigue from rapid price increases, combined with the government's tightening of loan regulations and interest rate hikes, has led to a sharp decline in the number of people willing to buy homes.

According to the monthly time series statistics from KB Kookmin Bank on the 26th, the buyer dominance index in the Incheon housing sales market this month recorded 41.5, falling 15.6 points from the previous month. This is the lowest level in 29 months since August 2019 and is the second lowest among metropolitan cities nationwide, following Daegu.

This index soared to a record high of 139.1 in August last year but has continued to decline since falling below the baseline of 100 to 80.6 in November. The buyer dominance index is a measure that quantifies the ratio of demand to supply on a scale from 0 to 200 based on surveys of real estate agencies. A value below the baseline of 100 indicates that the selling pressure in the market is stronger than the buying pressure.

Apartment Listings Accumulate Due to Worsening Buyer Sentiment... Increased by 75% Over 5 Months

As buyer sentiment worsens, listings are also piling up. According to the real estate information app Apartment Real Transaction Price (Asil), as of this date, the number of apartment listings for sale in Incheon reached 19,464, an increase of 4,782 listings (32.5%) compared to three months ago (14,682 listings). Compared to the end of August last year (11,086 listings), when listings were at their lowest during the boom, this represents an increase of 8,378 listings (75.5%).

The proportion of transactions at lower prices is also increasing in the market. According to the 'National Apartment Transaction Status Analysis' data submitted by the Korea Real Estate Board to Kim Hoe-jae, a member of the National Assembly Land, Infrastructure and Transport Committee, the proportion of Incheon apartment transactions in December last year that were below the highest price was 62.8%. The proportion of price-decreasing transactions in Incheon apartments was low at 20.7% in September last year but doubled to 39.6% in November and has been on the rise since then.

The downward transaction trend is also clearly reflected in actual transaction prices. A 164㎡ (exclusive area) apartment in Samik Ceramic, Mansu-dong, Namdong-gu, Incheon, was traded for 510 million KRW in October last year but was sold for 300 million KRW on December 29 last year, dropping by 210 million KRW. An 84㎡ apartment in Pungnim 1, Yeonsu-dong, Yeonsu-gu, was sold for 330 million KRW on December 17 last year, down 210 million KRW from the previous highest price of 540 million KRW in October.

The Gyeonggi region, also part of the metropolitan area, is experiencing a sharp decline in buying demand. The buyer dominance index in Gyeonggi rose to 132.0 in August last year but continued to decline, falling below the baseline to 76.8 in November and dropping further to 51.1 this month. Apartment listings in Gyeonggi reached 91,380 as of this date, an increase of 19,290 listings (26.7%) compared to three months ago (72,090 listings) and 30,410 listings (49.8%) compared to five months ago (60,970 listings). The proportion of price-decreasing apartment transactions also reached 72%, meaning that roughly 7 out of 10 apartments were sold at prices lower than the reported highest prices.

Song Seung-hyun, CEO of Urban and Economy, explained, "The fatigue from the soaring house prices has accumulated, and with the trend of interest rate hikes, the burden on buyers has increased, leading to a stronger wait-and-see attitude. Especially in the Gyeonggi and Incheon areas, where there are many mid- to low-priced apartments, it seems that the impact of tightened loan regulations has been directly felt."