Seoul Housing Prices Turn Down After Four Months... Apartment Prices Fall Most in 3 Years and 3 Months

Korea Real Estate Board July Nationwide Housing Price Trends

Amid growing concerns over a real estate transaction freeze and economic downturn, housing prices in Seoul have turned downward for the first time in four months.

According to the July National Housing Price Trend Survey by the Korea Real Estate Board on the 16th, the comprehensive housing sale price in Seoul (apartments, detached houses, and row houses) fell by 0.09% compared to the previous month. Apartment prices in Seoul have been weak for six consecutive months since February this year, marking the largest decline in three years and three months.

Seoul housing prices had fallen by 0.01% in March this year but showed either an upward or stable trend amid growing expectations of deregulation following the presidential election, before turning downward again after four months.

The Real Estate Board analyzed, "Despite the announcement of real estate tax relief, concerns over interest rate hikes are at play," adding, "Especially in the Gangbuk area, the decline has widened, shifting from stability last month to a downturn."

By district, Yongsan-gu, benefiting from the presidential office relocation and international business district development, rose by 0.05%, maintaining an upward trend, while Nowon-gu (-0.45%) showed weakness mainly in aging apartments in Sanggye and Junggye-dong, and Dobong-gu (-0.32%) also declined mainly in Dobong and Banghak-dong, leading to a drop in housing prices.

Photo by Yonhap News

In the Gangnam area, Seocho-gu continued its strong performance with a 0.09% increase, whereas Gangnam-gu turned downward with a 0.02% decline.

Meanwhile, apartment prices in Seoul fell by 0.22% in July compared to June, significantly widening the decline from the previous month’s -0.08%. This marks the largest drop in three years and three months since April 2019 (-0.40%).

National housing prices fell by 0.08% last month, a larger decline than the previous month’s -0.01%, indicating a continued overall weak market.

Housing prices in Gyeonggi-do dropped by 0.16% last month, a much larger decline than the previous month’s -0.05%, and Incheon also saw its decline nearly double from -0.14% in June to -0.26% last month.

The Real Estate Board explained, "In Gyeonggi-do, the decline expanded mainly in areas where housing price increases had been high in the southern metropolitan area, and in Incheon, the prolonged cautious stance due to new housing supply contributed to the widening decline."

The jeonse (long-term lease) market is also continuing its simultaneous weakness. Recently, while demand for lease renewals has increased, new contract demand has decreased, leading to an accumulation of available properties and continued price declines.

Last month, the nationwide housing jeonse price fell by 0.08% compared to the previous month (-0.02%), widening the decline.

Seoul’s housing jeonse prices dropped by 0.07%, expanding the decline from the previous month’s -0.02%, and Gyeonggi-do’s housing jeonse prices shifted from stable in June to a 0.21% decline in July.

Unlike jeonse, monthly rent prices continued to rise.

Seoul’s monthly housing rent increased from 0.06% in June to 0.07% in July, and apartment rents rose from 0.24% to 0.25%, showing an increased rate of growth.

The Real Estate Board explained, "With interest rate hikes, there is an increase in the shift from jeonse loans to semi-jeonse and monthly rent. In Seoul, this trend is centered on small to medium-sized units; in Gyeonggi-do, demand remains steady mainly in Icheon-si, which has good proximity to workplaces; and in Incheon, monthly rent increases continue mainly in Gyeyang, Seo, and Yeonsu districts."

Nationwide monthly housing rent rose by 0.16% last month, the same as in June, and nationwide apartment monthly rent increased by 0.22%, slightly up from 0.21% the previous month.