Trading Supply-Demand Index Returns to August 2012 Level
Buying Momentum Disappears... Further Decline and Wait-and-See Trend Continue
Possibility of Further Drop Due to Interest Rate Hikes
Seoul apartment prices have recorded the largest decline for three consecutive weeks, while buyer sentiment has returned to levels seen 10 years ago.
According to the Korea Real Estate Board on the 25th, this week's Seoul apartment sales supply-demand index stood at 67.9, down from 69.2 last week. This is the lowest figure in 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 indicates that there are more sellers than buyers in the market.
Since the third week of November last year, when the Seoul apartment supply-demand index fell below the baseline at 99.6, a buyer's market with more sellers than buyers has continued for 54 consecutive weeks (one year).
According to Asil, a real estate big data company, the number of Seoul apartment listings was 54,927, a 1.2% decrease compared to 55,594 ten days ago. Compared to a month ago (57,531 listings), it has decreased by 4.6%.
Looking at the sales supply-demand index by region in Seoul, the southwest area, including Yeongdeungpo, Yangcheon, Dongjak, and Gangseo districts, fell from 70.0 last week to 68.0 this week, breaking below the 70 mark.
Additionally, the northwest area, including Eunpyeong, Mapo, and Seodaemun districts, dropped from 65.4 last week to 63.8 this week, marking the lowest among the five major regions of Seoul.
The northeast area, including Nowon, Dobong, and Gangbuk districts, declined from 65.6 last week to 64.5 this week, while the central area, including Yongsan, Jongno, and Jung districts, fell from 67.3 to 66.3. The southeast area, including Gangnam, Seocho, Songpa, and Gangdong districts, also decreased from 75.7 last week to 75.0 this week.
As homes put up for sale fail to sell, many listings are being converted to jeonse (long-term lease) or monthly rent.
The number of Seoul apartment jeonse and monthly rental listings reached 82,931 as of the 25th, a 3.3% increase compared to 80,273 listings ten days ago.
The sales supply-demand index in Gyeonggi Province fell from 72.8 last week to 72.0, and in Incheon from 72.1 to 70.8.
Accordingly, the overall sales supply-demand index for the Seoul metropolitan area also dropped from 71.6 last week to 70.5 this week, with the 70 mark on the verge of breaking.
Simply put, this is the lowest level in 10 years and 4 months since the third week of July 2012, when the index was 69.6.
The nationwide apartment sales supply-demand index was 75.9, down from 76.9 last week, marking the lowest in 10 years and 4 months since the first week of July 2012 (75.0).
The jeonse market is also continuing to stagnate. In the Seoul apartment market, jeonse listings are increasing while the number of tenants looking for jeonse is decreasing, causing the jeonse supply-demand index to fall from 70.6 last week to 68.5 this week, breaking below the 70 mark.
The nationwide jeonse supply-demand index was 77.1, and the metropolitan area was 70.5, both lower than last week.
Meanwhile, despite the government's successive regulatory easing measures, the decline in apartment prices is accelerating.
As of the third week of November, Seoul apartment prices fell 0.52% compared to last week (-0.46%). This marks 26 consecutive weeks of decline and breaks the record for the largest drop for three consecutive weeks since the Korea Real Estate Board began price surveys in May 2012.
There are also many complexes where prices have fallen below the lowest levels from two years ago. According to the Ministry of Land, Infrastructure and Transport's real transaction disclosure system, an 84.244㎡ unit in Godeok Gracious, Godeok-dong, Gangdong-gu, was traded for 1.39 billion KRW on the 6th of this month. This is 100 million KRW lower than the lowest price two years ago (1.49 billion KRW). Compared to the previous transaction in August at 1.63 billion KRW, the price dropped by 240 million KRW in three months.
Despite recent reconstruction prospects, the Eunma Apartment in Daechi-dong, Gangnam-gu, was traded close to the lowest price from two years ago. A 76.79㎡ unit was sold for 1.77 billion KRW on the 8th, approaching the two-year low of 1.745 billion KRW. Compared to the highest price recorded this year in May at 2.54 billion KRW, this is a decrease of 770 million KRW.
The Korea Real Estate Board analyzed, "Buyers are adopting a wait-and-see attitude, expecting further price drops due to anticipated interest rate hikes and concerns over price declines. The market situation continues with sporadic transactions mainly for urgent sales, leading to an expanded decline."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
!["The Woman Who Threw Herself into the Water Clutching a Stolen Dior Bag"...A Grotesque Success Story That Shakes the Korean Psyche [Slate]](https://cwcontent.asiae.co.kr/asiaresize/183/2026021902243444107_1771435474.jpg)
