Frozen Housing Market... No Areas with Rising Apartment Prices in the Seoul Metropolitan Area

Apartment view around Seoul / Photo by Jinhyung Kang aymsdream@

[Asia Economy Reporter Ryu Taemin] As buying demand turned cautious and the transaction freeze continued, the weakness in the metropolitan area apartment market persisted for the fifth consecutive week. Due to the impact of move-ins, listings have accumulated from the outskirts, leading to a larger decline in apartment sale and jeonse prices.

According to Real Estate R114 on the 20th, the apartment price change rate in Seoul for the third week of August remained the same as the previous week at -0.02%. Reconstruction and general apartments fell by 0.01% and 0.03%, respectively. New towns dropped by 0.02%, and Gyeonggi·Incheon fell by 0.03%, with the decline margin increasing by 0.01 percentage points compared to last week.

This week in Seoul, 14 out of 25 districts declined, 11 remained flat, and there was not a single district that rose. In Seoul, amid weakened buying sentiment due to increased loan interest rates and interest burdens, large complexes with many listings mainly declined. By region, ▲Nowon (-0.13%) ▲Gangdong (-0.09%) ▲Songpa (-0.05%) ▲Seongbuk (-0.04%) ▲Gwangjin (-0.03%) ▲Dongdaemun (-0.03%) ▲Eunpyeong (-0.03%) fell.

The first-generation new towns also shifted from flat (0.00%) last week to a decline. New towns such as ▲Bundang (-0.04%) ▲Gwanggyo (-0.04%) ▲Dongtan (-0.03%) ▲Pangyo (-0.03%) fell.

Gyeonggi·Incheon declined mainly in areas with a large volume of apartment move-ins. By region, ▲Hwaseong (-0.08%) ▲Namyangju (-0.07%) ▲Incheon (-0.06%) ▲Bucheon (-0.05%) ▲Gimpo (-0.04%) ▲Suwon (-0.04%) fell.

Ye Kyunghee, chief researcher at Real Estate R114, said, “Although the government announced its first housing supply measures, since it only suggests the direction, the impact on the market is expected to be limited until a concrete implementation plan is announced. As the COFIX, which is the benchmark for variable interest rates on mortgage loans, rose compared to the previous month, the transaction freeze in the apartment market due to weakened buying sentiment is expected to continue.”