Seoul Apartment Buying Sentiment Pauses After 8 Weeks... Gangnam Apartment Prices Remain Strong

The number of autonomous districts in Seoul where the average apartment sale price exceeds 50 million KRW per 3.3㎡ has more than doubled in one year. As of November last year, only Gangnam-gu, Seocho-gu, and Songpa-gu among the 25 autonomous districts in Seoul had average apartment sale prices exceeding 50 million KRW per 3.3㎡, but last month, Yongsan-gu, Seongdong-gu, Mapo-gu, and Gwangjin-gu were added, making a total of seven districts. The photo shows the view of Seoul apartments from 63 Square. Photo by Kim Hyunmin kimhyun81@

[Asia Economy Reporter Kim Min-young] The buying sentiment in the Seoul metropolitan area, which had been recovering for seven consecutive weeks after the presidential election, has stalled. This appears to be influenced by loan regulation measures, additional interest rate hike issues, and the new government's lack of clear direction on real estate regulation easing.

According to the Korea Real Estate Board on the 1st, the apartment sales and purchase supply-demand index in Seoul for this week (as of the 25th) slightly dropped to 90.5 from 91.4 last week.

The Seoul apartment sales and purchase supply-demand index had risen for seven consecutive weeks after the presidential election due to expectations of regulatory easing such as reconstruction tax benefits by the new government, but the upward trend stopped this week. Generally, when the sales and purchase supply-demand index is below the baseline (100), it means there are more sellers than buyers in the market.

After the presidential election, buying sentiment rose on expectations of tax and reconstruction regulation easing, but recently, due to the Bank of Korea's additional interest rate hikes and the new government's move to slow down regulatory easing, buyers seem to have shifted to a wait-and-see mode.

Seoul apartment prices have remained flat for four consecutive weeks through this week. Northern districts such as Nowon (-0.01%), Dobong (-0.02%), Seongbuk (-0.03%), and Gangbuk-gu (-0.01%) continue to show a downward trend. On the other hand, apartment prices in Gangnam (0.03%), Seocho (0.05%), and Yongsan-gu (0.03%) have shown strong sales prices since the presidential election, deepening polarization between regions.

Due to expectations of reconstruction regulation easing and a preference for owning a single well-maintained home, the sales and purchase supply-demand index in the southeastern area (Gangnam 4 districts) and the southwestern area including Mokdong recorded 96.1 and 91.5 respectively, maintaining the same level as last week. The downtown area (Yongsan, Jongno-gu, etc.), which saw strong housing prices due to the presidential office relocation, also saw a slight decline in the index to 90.4 this week from 91.3 last week.

Meanwhile, the northwestern area (Eunpyeong, Seodaemun, Mapo-gu) saw the largest drop among the five major regions of Seoul, falling from 89.1 last week to 87.0 this week. The northeastern area, including Nowon, Dobong, and Gangbuk-gu, also decreased from 88.7 last week to 86.8 this week.