Apartment Prices Hit Record Largest Drop Again... Falling Like Autumn Leaves Despite Deregulation

Seoul Apartment Prices Fall for 25 Consecutive Weeks
Decline Continues Even in Deregulated Areas

Photo by Asia Economy

Despite the government continuously implementing measures to ease real estate regulations, apartment prices nationwide have plunged again, recording the largest drop ever, deepening the market slump.

According to the "Weekly Apartment Price Trend for the 2nd Week of November" released by the Korea Real Estate Board on the 17th, apartment prices in Seoul fell 0.47% compared to last week (-0.38%).

This marks the 25th consecutive week of decline and breaks the record for the largest two-week drop since the Real Estate Board began price surveys in May 2012.

Apartment prices in Nowon-gu saw the drop widen from -0.55% last week to -0.74% this week, with steep declines also seen in Dobong (-0.67%) and Gangbuk (-0.63%)?areas collectively known as 'Nodogang'.

The Real Estate Board analyzed, "With the interest rate hike trend expected to continue for the time being, buyers remain cautious. The market situation has worsened, with only sporadic inquiries for urgently reduced-price properties, leading to an expanded rate of decline compared to last week."

Source: Korea Real Estate Board

Apartment prices nationwide and in the metropolitan area also fell by 0.47% and 0.57%, respectively, surpassing last week's record declines of -0.39% and -0.47%.

In Gyeonggi-do (-0.59%) and Incheon (-0.79%), where regulations were lifted except for Gwacheon, Seongnam (Bundang and Sujeong-gu), Hanam, and Gwangmyeong City, the rate of decline widened compared to last week (-0.49%, -0.60%).

In Gyeonggi-do, Siheung City's decline deepened from -0.58% last week to -0.71% this week, Namyangju from -0.69% to -0.79%, and Goyang from -0.46% to -0.61%.

Gwacheon (-0.83%), Seongnam Bundang-gu (-0.53%), Hanam (-0.57%), and Gwangmyeong City (-0.95%), which were excluded from the deregulated areas, showed expanded declines compared to last week, except for Seongnam Sujeong-gu (-0.63%).

Meanwhile, provinces that were deregulated earlier continued their downward trend, falling from -0.32% last week to -0.37% this week.

The jeonse (long-term lease) market is also experiencing an expanded decline due to a backlog of new listings.

This week, Seoul apartment jeonse prices fell 0.59%, a larger drop than last week's -0.48%, marking the steepest decline in 10 years and 6 months since the Real Estate Board began price surveys.

The Real Estate Board explained, "Due to the expected base interest rate hike, there has been an increase in half-jeonse and monthly rent conversions, causing a sharp drop in jeonse demand. Additionally, existing properties are being converted from sales to jeonse, worsening the backlog of listings and causing transaction prices to fall, which expanded the rate of decline compared to last week."

Gyeonggi-do (-0.73%) and Incheon (-0.85%) also saw larger declines than last week, continuing the record-breaking downward trend in both the metropolitan area (-0.70%) and nationwide (-0.53%).