The Relentless Decline of Gangbuk Apartment Prices... Countdown to Breaking the Average '1 Billion Won' Mark

Average Apartment Sale Price in Gangbuk Area 1.08 Billion Won
"If the Trend Continues, It Will Enter the 900 Million Won Range by Year-End"
Billion-Won Unit Collapse Nationwide... Five Major Metropolitan Cities Also Entering the 300 Million Won Range

On the 14th, in a real estate-dense shopping district in Songpa-gu, Seoul, where the decline in real estate prices and the transaction freeze phenomenon continue, apartment listings with market prices are posted. Photo by Jinhyung Kang aymsdream@

[Asia Economy Reporter Kim Hyemin] As the downturn in Seoul real estate deepens, the average apartment sale price in the Gangbuk area is entering the final countdown to breaking into the 900 million KRW range. A surge in declining transactions in districts like Nowon-gu is also pulling down the average price. With buyer sentiment weakening, the leading digit of average prices is changing not only in Seoul but across various regions nationwide.

According to KB Kookmin Bank's monthly housing trend report on the 5th, the average apartment sale price in the Gangbuk area in September was 1,080.9 million KRW, down 3.03 million KRW from the previous month. The Gangbuk area refers to the 14 autonomous districts north of the Han River, including Nowon-gu, Gangbuk-gu, and Dobong-gu.

Despite the downward trend that began at the end of last year, the average apartment sale price in Gangbuk steadily rose, entering the 1 billion KRW range for the first time in February this year. However, as transactions sharply declined and sales were mainly focused on quick sales, the average price began to fall from June. An industry insider said, "If the current downward trend continues, it is expected to enter the 900 million KRW range by the end of this year."

By region, the decline in Nowon-gu, Dobong-gu, and Seongbuk-gu appears to have pulled down the average sale price in the Gangbuk area. Apartments in Gangbuk have fallen 0.09% since the beginning of this year, while Seongbuk-gu dropped 1% during the same period. Nowon-gu also fell 0.95%, and Dobong-gu declined 0.84%, showing a larger drop compared to the Gangbuk average.

According to the Ministry of Land, Infrastructure and Transport's real transaction price disclosure system, a 58㎡ unit in Jugong Complex 6 in Sanggye-dong, Nowon-gu, was traded at 700 million KRW at the end of August, which is more than 200 million KRW lower than the highest price of 940 million KRW recorded in September last year for the same size. Similarly, a 41㎡ unit in Jugong Complex 4 in Chang-dong, Dobong-gu, was sold on the 17th for 450 million KRW, which is 170 million KRW lower than the highest price of 620 million KRW in October last year.

The collapse of average prices by hundreds of millions of KRW due to the real estate downturn is occurring nationwide. In the five metropolitan cities in the provinces (Daejeon, Daegu, Ulsan, Busan, Gwangju), the average apartment sale price this month was 399.28 million KRW, falling below 400 million KRW for the first time in eight months. The average apartment sale price in the Seoul metropolitan area, including Seoul, Gyeonggi, and Incheon, has also declined for three consecutive months since June, recording 801.75 million KRW this month. If the trend continues, it is expected to drop to the 700 million KRW range next month.

Park Wongab, Senior Real Estate Specialist at KB Kookmin Bank, said, "Until signals appear that the interest rate hike rally has ended or that prices have fallen as much as they can, the downward trend is inevitable," adding, "This phase may continue for some time."