Only Distressed Sales Everywhere... Seoul Apartment Buying Sentiment Faces Harshest Winter in 10 Years

Falling for 28 Consecutive Weeks, Breaking Below 70
Lowest in 10 Years and 3 Months Since August 2012

Photo by Asia Economy

The Seoul apartment sales supply-demand index has fallen for 28 consecutive weeks, breaking below the 70 mark. Due to interest rate hikes and concerns about an economic recession, there are no buyers for apartments, only a continuous line of sellers.

According to the Korea Real Estate Board on the 18th, this week’s (as of the 14th) Seoul apartment sales supply-demand index was 69.2, down 1.5 points (p) from last week’s 70.7.

This marks the 28th consecutive week of decline since the first week of May (91.1), and numerically, it is the lowest in over 10 years and 3 months since the first week of August 2012 (67.5).

The sales supply-demand index being below the baseline of '100' means that there are more people wanting to sell houses than those wanting to buy in the market.

The Seoul apartment supply-demand index has been below the baseline since the third week of November last year, recording 99.6, indicating a seller’s market where there are more sellers than buyers.

The decline in buying sentiment is appearing simultaneously across the five major districts of Seoul.

The northwest area, including Eunpyeong, Mapo, and Seodaemun districts, recorded the lowest index at 66.4, followed by the northeast area, including Nowon, Dobong, and Gangbuk districts, at 65.6.

The central area, including Yongsan, Jongno, and Jung districts, fell from 68.1 last week to 67.3 this week, and the southwest area, including Yeongdeungpo, Yangcheon, Dongjak, and Gangseo districts, dropped from 72.9 last week to 70.0 this week.

The southeast area, including Gangnam, Seocho, Songpa, and Gangdong districts, had the highest index in Seoul at 75.7 but also declined following last week’s 76.7.

Gyeonggi (72.8) and Incheon (72.1) also saw their indices fall compared to last week, bringing the overall metropolitan area sales supply-demand index down from 73.0 last week to 71.6. Like Seoul, this is the lowest in about 10 years and 3 months since the first week of August 2012 (71.2).

Indices for the five major metropolitan cities outside the metropolitan area (75.4) and other provinces excluding metropolitan cities (81.7) also declined simultaneously.

Accordingly, the nationwide apartment index fell to 76.9 from 78.5 last week. This is the lowest figure in 3 years and 4 months since the third week of June 2019 (76.8).

Similar to the sales market, in the jeonse (long-term lease) market, there are more landlords looking for tenants than tenants looking for jeonse contracts.

This week’s apartment jeonse supply-demand indices for Seoul (70.6), the metropolitan area (72.3), provinces (84.0), and nationwide (78.4) all declined compared to last week.

Along with worsening buying sentiment, apartment prices continue to fall. Seoul apartment prices dropped 0.47% compared to last week’s -0.38%.

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

The Real Estate Board analyzed, "With the expectation that the interest rate hike trend will continue for the time being, the buying wait-and-see stance persists," adding, "There are only intermittent purchase inquiries for urgent sale properties that have been further price-adjusted downward, indicating a worsening market situation and an expanded rate of decline compared to last week."