[Asia Economy Reporter Noh Kyung-jo] As Seoul apartment sale prices have recorded the largest decline for three consecutive weeks, complexes that have changed hands at prices lower than the lowest prices two years ago are emerging one after another.
According to the Ministry of Land, Infrastructure and Transport's actual transaction price disclosure system on the 25th, an 84.244㎡ unit in Godeok Gracium, Godeok-dong, Gangdong-gu was traded for 1.39 billion KRW on the 6th of this month. Excluding direct transactions, this is 100 million KRW lower than the lowest price two years ago (1.49 billion KRW). Compared to the previous transaction price of 1.63 billion KRW on August 16, it has dropped by 240 million KRW in three months.
A 59.99㎡ unit in Raemian Jangwi First High, Seongbuk-gu, was already sold for 850 million KRW in July, falling below the lowest price two years ago (865 million KRW). Since then, with one transaction each month, it has set new yearly lows, and last month it changed hands for 770 million KRW. The highest price this year was 1 billion KRW, recorded in a transaction in February.
The Gangnam area is no exception. Despite recent redevelopment prospects, Eunma Apartment in Daechi-dong, Gangnam-gu, was traded close to the lowest price two years ago. A 76.79㎡ unit was sold for 1.77 billion KRW on the 8th, approaching the lowest price two years ago of 1.745 billion KRW. Compared to the yearly high of 2.54 billion KRW recorded in May this year, it has fallen by 770 million KRW.
Experts explained that the market generally compares actual transaction prices from two years ago because the implementation of the three lease laws (Jeonse and monthly rent reporting system, rent ceiling system, and contract renewal request system) in 2020 further distorted the market. At that time, as Jeonse prices surged, sale prices also rose simultaneously. The government has also recently restored the official property price realization rate to the level of two years ago.
Yoon Ji-hae, chief researcher at Real Estate R114, said, "This phenomenon occurs because only the lowest-priced listings are traded in a buyer-favored market," adding, "It may also reflect the effect of speculative demand being weeded out during the real estate market downturn."
She continued, "It is a difficult time for redevelopment prospects to gain momentum," and said, "There was a measure on the 14th to lift regulations such as the designation of adjustment areas, but it will take some more time for the effects to appear."
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