[Asia Economy Reporter Noh Kyung-jo] Amid the ongoing trend of interest rate hikes and declining real estate prices, the nationwide housing price drop last month reached a record high. It fell more than during the global financial crisis and marked the largest decline since the Korea Real Estate Board began related surveys.
According to the Korea Real Estate Board's December Nationwide Housing Price Trend Survey on the 16th, the comprehensive housing (apartments, row houses, detached houses) sales price nationwide fell by 1.98% compared to the previous month. This figure is 1.20 percentage points lower than December 2008 (-0.78%), during the global financial crisis.
By region, the Seoul metropolitan area saw the decline deepen from -1.77% to -2.60%, while other provinces increased from -1.01% to -1.42%. Seoul and Gyeonggi Province fell by 1.96% and 2.88%, respectively, and Incheon (-3.19%) entered the 3% decline range as the downward trend continued mainly in large apartment complexes concentrated in Yeonsu and Namdong districts. Among all cities and provinces nationwide, Sejong (-5.00%) recorded the largest drop.
In Seoul, Nowon-gu (-4.28%) saw significant declines centered on older small-to-medium-sized units in Junggye, Sanggye, and Gongneung-dong where urgent sales occurred. Dobong-gu (-2.98%) experienced notable drops mainly in major complexes in Banghak, Chang, and Ssangmun-dong. Songpa-gu (-2.17%) had falling transactions in major complexes in Jamsil and Garak-dong, while Dongjak-gu (-1.78%) saw a prolonged wait-and-see stance in major complexes in Sadang and Daebang-dong, increasing the decline.
Looking at apartments alone, the price drop rate is even higher. Seoul fell by 2.96%, surpassing the record largest drop of -1.73% in December 2008. Nationwide (-2.91%) and the Seoul metropolitan area (-3.66%) also recorded all-time high decline rates.
Jeonse (long-term lease) prices also continued to fall. Last month, the nationwide comprehensive housing Jeonse price dropped by 2.42%, nearly 1 percentage point lower than the previous month. The decline rates in the Seoul metropolitan area (-2.18% → -3.40%) and Seoul (-1.84% → -3.08%) were particularly large, entering the 3% range. The burden of Jeonse loan interest has increased, and the volume shifting from sales to Jeonse has grown, intensifying the accumulation of listings. In Seoul, the highest decline rates were in Nowon-gu (-4.83%), Seongbuk-gu (-4.13%), Gangnam-gu (-3.72%), and Songpa-gu (-3.61%), in that order.
Earlier, monthly rent prices, which turned downward in November last year, fell by 0.28% last month, continuing the decline for two consecutive months. The decline widened simultaneously in the Seoul metropolitan area (-0.21% → -0.45%), Seoul (-0.04% → -0.27%), and other provinces (-0.03% → -0.13%). The Real Estate Board explained, "In the case of monthly rent, the decline accompanied the intensified fall in Jeonse prices, mainly in major complexes," adding, "Incheon was significantly affected by new housing supply, and other provinces experienced seasonal off-season effects, leading to reduced relocation activities."
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