Weekly Decline Narrowed This Year... Trading Remains Cautious
Jeonse Prices Drop Less... Only Gyeonggi Falls by Over 1%
[Asia Economy Reporter Noh Kyung-jo] Seoul apartment prices have reduced their decline for five consecutive weeks this year. Following the government's easing of real estate regulations and the global trend of slowing the pace of benchmark interest rate hikes, expectations for a market trend reversal have increased.
According to the weekly apartment price trend announced by the Korea Real Estate Board on the 2nd, Seoul apartment prices in the fifth week of January (as of the 30th) fell by 0.25%, narrowing the decline by 0.06 percentage points compared to the previous week (-0.31%). The downward trend continued for 36 consecutive weeks.
View of an apartment complex from Seoul Sky, the observation deck of Lotte World Tower in Songpa-gu, Seoul. / Photo by Yonhap News
The Real Estate Board explained, "Although the gap between sellers' and buyers' desired prices has not narrowed, leading to a wait-and-see stance, there are some purchase inquiries following intermittent quick-sale transactions due to expectations that future interest rate hikes will be limited and reductions in market interest rates."
Among the 25 autonomous districts in Seoul, the area with the largest decline was Gangseo-gu (-0.62%). This was followed by Geumcheon (-0.51%), Gwanak (-0.40%), and Gangdong-gu (-0.36%), with the downward trend being prominent in areas south of the Han River. In the northern part of Seoul, Dobong and Eunpyeong-gu (each -0.25%) saw price drops mainly in major complexes in Ssangmun, Chang, Banghak-dong, and Eungam, Bulgwang, Jingwan-dong. Areas where the decline widened compared to the previous week included Mapo-gu (-0.19% → -0.20%), Seocho-gu (-0.06% → -0.15%), and Gangnam-gu (-0.11% → -0.18%).
In Gyeonggi (-0.55%) and Incheon (-0.39%), the rate of decline also narrowed. However, the Real Estate Board explained that transactions are barely taking place due to weakened buyer sentiment. There were also several sub-regions where prices fell more than the average. Hwaseong-si in Gyeonggi (-1.01%) dropped by 0.01 percentage points more than the previous week, and Hanam-si (-0.96%) saw price declines mainly in Misa New Town and Deokpung and Sinjang-dong. In Incheon, Bupyeong-gu (-0.52%) and Yeonsu and Jung-gu (-0.48%) had higher decline rates than the average.
The five major metropolitan cities in the provinces fell by 0.40%, reducing the decline compared to the previous week (-0.49%). By city/province, three areas?Gangwon (-0.10% → -0.12%), Jeonbuk (-0.19% → -0.23%), and Jeju (-0.14% → -0.18%)?increased their rate of decline, while Sejong (-1.00%) remained the same as the previous week.
Nationwide apartment jeonse prices also fell by 0.71%, narrowing the decline compared to the previous week (-0.75%). Among them, only Gyeonggi (-1.06%) experienced a decline in the 1% range. Seoul and Incheon fell by 0.96% and 0.88%, respectively. The five major metropolitan cities in the provinces showed a decline of 0.59%.
The Real Estate Board stated, "Under the high-interest rate environment, transactions with large declines are ongoing, and as listing prices are adjusted downward, the accumulation of listings due to the influence of regional move-in volumes is intensifying, leading to continued declines in jeonse prices."
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