[Asia Economy Reporter Kim Min-young] According to KB market prices, the nationwide housing sale and jeonse prices saw a significant increase in the rate of decline, continuing the downward trend in house prices. The prices of leading apartments, which represent the top 50 complexes by market capitalization, fell by more than 3% in just one month.
According to the housing price trend survey by KB Kookmin Bank on the 27th, the average nationwide housing sale price (including apartments, row houses, multi-family houses, and detached houses) fell by 1.10% compared to the previous month as of this month. Nationwide house prices based on KB market prices turned downward in August this year for the first time in 3 years and 1 month, and continued to decline last month (-0.55%), with the rate of decline doubling.
House prices in Seoul also fell by 0.88%, continuing the decline for four consecutive months following last month’s (-0.45%) drop. The rate of decline nearly doubled compared to the previous month. House prices in Gyeonggi Province fell by 1.68%, and Incheon also dropped by 2.09%. During the same period, the decline in house prices in the Seoul metropolitan area increased from 0.71% to 1.44%. The five major metropolitan cities (Daejeon, Daegu, Ulsan, Busan, Gwangju) saw a 1.03% drop in house prices this month, and other provinces (Sejong City and 8 provinces) fell by 0.55%, both increasing their rate of decline.
The 'KB Leading Apartment 50 Index' recorded 94.52 this month, down 3.14 percentage points (p) from last month’s 97.58. This is the largest monthly drop since the related statistics began to be compiled in January 2009.
The KB Leading 50 Index is a composite index of the prices of the top 50 apartments nationwide by market capitalization. It includes complexes in Seoul’s Gangnam area such as Eunma, Apgujeong Hyundai, and Jamsil Jugong, as well as nationwide large-scale reconstruction and newly built complexes like Mapo Raemian Prugio and Mokdong New Town. The leading index is also a leading indicator that most sensitively reflects price fluctuations.
Nationwide housing jeonse prices also fell by 1.43% this month, increasing the rate of decline compared to last month (-0.51%). Jeonse prices in Seoul (-1.41%), Incheon (-2.20%), and Gyeonggi (-2.43%) also saw a wider decline than last month, increasing the rate of decline in the Seoul metropolitan area’s housing jeonse prices (-0.69% → -2.03%).
Jeonse prices in other provinces also fell across the board. Jeonse prices in the five major metropolitan cities dropped by 1.22% compared to last month, and other provinces fell by 0.51%, both increasing their rate of decline.
The nationwide sale price outlook index fell from 65 last month to 59 this month. The KB Real Estate Price Outlook Index quantifies the rise and fall outlook of house prices in the respective areas based on a survey of about 4,500 real estate agencies nationwide. A value above 100 indicates a higher expectation of price increases, while below 100 means more expectations of price declines.
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