Seoul Apartment Sales Supply-Demand Index Declines for Third Consecutive Month
Apartment Prices Fall by Largest Margin in 3 Years and 4 Months
Since the announcement of the tax reform plan, including the abolition of the comprehensive real estate tax (종부세) surcharge on multi-homeowners, the withdrawal of listings by multi-homeowners has continued, but the buying sentiment for apartments in Seoul is increasingly weakening. Although concerns about price increases due to the decrease in listings could stimulate buying sentiment, the buying momentum shows little sign of revival.
According to Asil, a real estate big data platform, as of the previous day, the number of apartment listings in Seoul was 61,785, a 3.53% decrease compared to 64,046 listings on July 21.
Earlier on July 21, the government announced a tax reform plan that included shifting the 종부세 taxation system from the number of houses to a value-based system and abolishing the surcharge rates for multi-homeowners.
Multi-homeowners, who had been complaining about rising interest rates, falling house prices, and tax burdens, began withdrawing their listings, saying "there is no rush." Listings decreased from 64,046 on July 21 to 63,447 ten days later, and barely held at the 60,000 level (60,940) on August 8.
Although listings are decreasing, buying sentiment remains unmoved. The 'panic buying' that had appeared over the past two years amid decreasing listings and rising prices has completely disappeared.
According to a survey by the Korea Real Estate Board, the Seoul apartment sales demand-supply index this week is 84.4, marking a decline for 14 consecutive weeks since the survey on May 2 (91.1). The sales demand-supply index generally indicates that the lower it is below the baseline (100), the more sellers there are compared to buyers in the market. This means that the situation of having more sellers than buyers has continued for three months.
The sales demand-supply index in Incheon, where the 'escape from Seoul' buyers had flocked, recorded 93.4 this week, down 0.7 points from last week (94.0), and Gyeonggi Province also decreased from 89.2 last week to 89.0 this week.
Apartment prices continue to decline, with the rate of decrease gradually expanding.
According to the 'Weekly Apartment Price Trends for the Second Week of August' released by the Korea Real Estate Board, apartment prices in Seoul fell by 0.08%, widening the decline compared to last week (-0.07%). This is the largest drop in three years and four months since the survey on April 1, 2019 (-0.08%).
The apartment price change rate in Incheon recorded -0.15% this week following last week's -0.11%, and Gyeonggi Province recorded -0.10% this week, down from -0.09% last week. Accordingly, the overall apartment sales prices in the metropolitan area recorded -0.10% this week, following -0.09% last week, with the decline rate increasing.
The Korea Real Estate Board explained, "Price-adjusted listings are appearing one after another by region," adding, "Due to market concerns that the downward trend in housing prices will continue for the time being and the impact of the summer vacation season, buying inquiries are sluggish and transaction volumes are decreasing, which is expanding the rate of decline."
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