Seoul Apartment Prices See Largest Drop in 10 Years... Declining for 19 Consecutive Weeks

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Seoul apartment prices have recorded the largest weekly drop in over 10 years, continuing a decline for 19 consecutive weeks.

According to the weekly apartment price trend survey for the first week of October by the Korea Real Estate Board on the 6th, Seoul apartment prices fell by 0.21%. This is the largest drop in 9 years and 10 months since December 3, 2012 (-0.21%).

Seoul apartment prices have shown negative changes for 19 consecutive weeks since the last week of May (-0.01%), and the decline widened compared to last week (-0.19%).

Apartment prices in the southeastern area (Gangnam 4 districts) also saw an increased drop from -0.14% last week to -0.16% this week.

In Seocho-gu, apartment prices fell from -0.05% last week to -0.07% this week, and in Gangnam-gu, the decline widened from -0.10% to -0.13%.

Songpa-gu recorded a drop of -0.27%, which is 0.04 percentage points (p) larger than last week (-0.23%), marking the largest decline in 10 years and 1 month since the first week of September 2012 (-0.28%).

Nowon-gu (-0.36%) and Dobong-gu (-0.37%) also experienced an expanded decline compared to last week.

Source: Korea Real Estate Board

The Real Estate Board analyzed, "Due to concerns over additional interest rate hikes, buyer hesitation has deepened and inventory accumulation has intensified. Amid continuous downward price adjustments of listings, intermittent actual transaction price drops have occurred, leading to an expanded decline compared to the previous week."

Listings are steadily accumulating in the market, and transactions are virtually nonexistent unless they are urgent sales. According to the Seoul Real Estate Information Plaza, the number of apartment sales in Seoul in August (based on contract date) totaled 671, marking the lowest August transaction volume since the real transaction price survey began in 2006.

Apartment prices in the metropolitan area and nationwide fell by 0.25% and 0.20%, respectively, the largest declines in 10 years and 5 months since May 2012 when the Korea Real Estate Board started price surveys, similar to last week.

Apartment prices in Gyeonggi-do slightly eased from -0.27% last week to -0.26% this week, while Incheon remained down by 0.31%, the same as last week.

The jeonse (long-term lease) market is also continuing its weakness. Seoul's jeonse prices fell by 0.20%, a larger drop than last week (-0.18%), marking the biggest decline since the third week of February 2019 (-0.22%). Nationwide apartment jeonse prices fell by 0.21%, the same as last week.

The Real Estate Board explained, "Due to the interest burden on jeonse loans from interest rate hikes and the preference for half-jeonse and renewal contracts, new jeonse demand continues to decrease. Intermittent transactions centered on urgent sales and continuous downward price adjustments of listings have expanded the decline."