Despite Presidential Election Hopes... 7 out of 10 Apartments in Seoul Sold at Lower Prices

Proportion of Declines from All-Time Highs at 67.1%... Only Fire Sales Sold
Monthly Trading Volume Below 1,000 Continues... Record First
Polarization Deepens... 'Smart One Home' Alone Rises in Gangnam, Seocho, etc.

Apartment complex in Seoul area (Photo by Yonhap News)

[Asia Economy Reporter Ryu Tae-min] The proportion of price-decreasing transactions for Seoul apartments reached an all-time high last month. Although there are signs of a price rebound in some areas due to expectations of deregulation following the presidential election, the overall market is seeing an accumulation of listings, with transactions occurring mainly through urgent sales.

According to the actual transaction price trends of apartments in the metropolitan area submitted by the Ministry of Land, Infrastructure and Transport to Kim Hoe-jae, a member of the Democratic Party of Korea, from March 10 to 28, right after the presidential election, the proportion of Seoul apartment transactions below the previous highest price was 67.1%, up from 62.5% the previous month. This means that 7 out of 10 apartment transactions in Seoul last month were conducted at prices lower than the previous peak. The proportion of price-decreasing transactions in Seoul apartments has been rising for half a year, recording 35.1% in September last year, then 40.5%, 46.1%, 54.5%, 57.5%, and 62.5% consecutively.

It is interpreted that amid the severe transaction freeze, more homeowners are lowering prices to complete urgent sales. According to the Seoul Real Estate Information Plaza, as of this day, the number of apartment sales transactions in Seoul in February and March were 803 and 811 respectively. Compared to a year ago (3,841 and 3,762), this is about one-fifth of the volume. Considering the reporting deadline is 30 days from the contract date, the transaction volume may increase slightly, but this is the first time since Seoul began compiling related statistics in 2006 that monthly transaction volume has not exceeded 1,000.

As transactions fail to occur, listings are also accumulating. According to the real estate big data company Apartment Actual Transaction Price, the total number of apartment listings in Seoul as of this day was 52,815, an increase of 7,617 since the beginning of the year. This is the highest figure in 20 months since August 2020. As price-decreasing transactions increase, overall housing prices are also declining. According to the weekly apartment price trend data from the Korea Real Estate Board, Seoul apartment prices have fallen for 10 consecutive weeks since the fourth week of January, totaling a 0.16% decrease during that period.

Price-Decreasing Transactions Rise... Reconstruction and ‘Smart Single Units’ Rise Alone

However, polarization is observed by region and housing type. An analysis of the top 10 Seoul apartment complexes traded right after the presidential election (March 10?28) by Kim’s office showed that the average price of these complexes rose by 686 million KRW to 3.219 billion KRW compared to the previous highest price. Six of these are located in Gangnam and Seocho districts. Most are reconstruction complexes like Shinhyundai 11th Complex and Gaepo Woosung 1st Complex or high-priced apartments such as Acro River Park.

On the other hand, price-decreasing transactions continue in areas and general apartment complexes that do not fall into these categories. For example, a 59㎡ unit in Godeok Gracium, Godeok-dong, Gangdong-gu, Seoul, was sold for 1.11 billion KRW on March 9, which is 420 million KRW lower than the previous highest price of 1.53 billion KRW. A 59㎡ unit in e-Pyeonhansesang Sinchon 1st Complex, Bukahyeon-dong, Seodaemun-gu, Seoul, peaked at 1.51 billion KRW in July last year but changed hands for 1.4 billion KRW on March 2. Song Seung-hyun, CEO of City and Economy, evaluated, "Since the deregulation pledges have not yet been applied as actual policies, the market is showing a cautious attitude."