Seoul Sales Supply-Demand Index Declines for 15 Consecutive Weeks
Apartment Prices Fall in All 25 Districts of Seoul
As the nationwide real estate transaction freeze continues, apartment buying sentiment has declined for three consecutive months, reaching its lowest level in 2 years and 9 months. Seoul apartment buying sentiment has fallen for 15 consecutive weeks.
According to the Korea Real Estate Board on the 19th, this week's nationwide apartment sales supply-demand index was 89.3, down 0.8 points (p) from last week (90.1). This is the lowest level in about 2 years and 9 months since the second week of November 2019 (87.5).
If the sales supply-demand index is below the baseline (100), it means there are more people wanting to sell houses than those wanting to buy in the housing market. The nationwide apartment sales supply-demand index has been declining for 13 consecutive weeks since the third week of May (94.1), right after the one-year temporary exclusion of the capital gains tax surcharge on multi-homeowners was implemented on May 10.
The Seoul apartment sales supply-demand index dropped 0.7p from last week (84.4) to 83.7, marking the 15th consecutive week of decline.
The downtown area fell from 83.2 to 81.2, the northwest area from 77.7 to 77.6, and the northeast area from 77.9 to 77.2. The southeast area, which includes the Gangnam 4 districts, decreased from 90.7 to 90.2, and the southwest area dropped from 89.5 to 88.6.
The real estate market is showing signs of an increasingly severe transaction freeze nationwide due to growing concerns over interest rate hikes and economic recession.
◆All 25 districts in Seoul see apartment prices fall... lowest in 3 years and 6 months= Apartment prices are also unable to escape weakness. According to the Real Estate Board, this week Seoul apartment prices fell by 0.09%, widening the decline from last week (-0.08%).
By district, the declines were larger in Nowon-gu (-0.21%), Dobong-gu (-0.20%), Eunpyeong-gu (-0.18%), Guro-gu (-0.09%), Geumcheon-gu (-0.08%), and Songpa-gu (-0.07%).
In particular, Seocho-gu (-0.01%) turned to a decline for the first time in 6 months since the third week of February (-0.01%), resulting in apartment prices falling in all 25 districts of Seoul.
This is the first time in 184 weeks since the first week of February 2019 that apartment prices have fallen across the entire Seoul area on a weekly basis.
The Real Estate Board explained, "Due to the summer vacation season and heavy rain, inquiries from buyers have been sparse, and even when listing prices are adjusted downward, transactions are not being completed," adding, "As the decline in transaction volume continues, the extent of the price drop in the Seoul area has expanded."
Especially, the weekly apartment price decline in the metropolitan area recorded the largest drop in about 9 years and 6 months since the second week of February 2013 (-0.12%).
◆Jeonse supply-demand index also drops sharply= Since the implementation of the new lease law, which includes the right to request contract renewal and the cap on rent increases, the acceleration of the conversion of Jeonse (long-term deposit lease) to monthly rent due to the rising Jeonse prices has led to an accumulation of supply and a decrease in demand in the Jeonse market.
This week, the Real Estate Board's Jeonse supply-demand index nationwide was 93.1, down 0.5p from last week (93.6). In Seoul, it fell from 84.4 to 83.7. The index in the Gangbuk area dropped 0.9p from last week (90.6) to 89.7, falling below the 90 mark.
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