25 Autonomous Districts' Housing Prices Rise Together... After 1 Year and 9 Months
Loan Regulations Tightened, Trend May Be Difficult to Sustain
The rate of increase in Seoul housing prices has grown again. As the real estate recovery that began in the Gangnam area spreads to the outskirts, housing prices in all 25 autonomous districts have risen simultaneously. Amid a surge in rebound transactions in various locations, some complexes in Songpa-gu, where the price increase is steep, have seen prices rise by more than 500 million KRW compared to early this year. However, there are also views that it will be difficult for follow-up purchases to continue due to a slowdown in transaction volume and tightened loan regulations.
According to the Korea Real Estate Board on the 16th, the apartment sale price in Seoul in the second week of September rose by 0.13% compared to the previous week. After recording 0.14% in the third week of August, it slowed to 0.13% in the fourth week and 0.11% in the first week of September, but the rate of increase has expanded again.
An official from the Korea Real Estate Board explained, "Although transactions are not active due to the gap between sellers' and buyers' desired prices, inquiries for purchase have been steady mainly for complexes with redevelopment benefits and new constructions within the area, and some rising transactions have been maintained, leading to an expanded rate of increase."
A notable point is that housing prices in all autonomous districts of Seoul rose simultaneously. It is the first time in 1 year and 9 months since the first week of December 2021 that apartment sale prices in all 25 districts of Seoul have increased. This is interpreted as the housing price recovery, which had been spreading mainly in the Gangnam area after the easing of real estate regulations earlier this year, now extending to the outskirts where mid- to low-priced apartments are concentrated.
The steepest increase in housing prices was in Songpa-gu, recording 0.24% in the second week of September. Accordingly, there are numerous complexes where actual transaction prices have risen by several hundred million KRW compared to the second half of last year or early this year. For example, the Trizium complex in Jamsil-dong, with an exclusive area of 84㎡, changed hands for 2.3 billion KRW on the 22nd of last month, which is 530 million KRW higher than 1.77 billion KRW in January this year. Nearby, a 124㎡ unit in Licenz was traded for 3.365 billion KRW on the 28th of last month, up 535 million KRW from 2.83 billion KRW in May this year.
Besides Songpa-gu, Gangnam-gu (0.20%) and Gangdong-gu (0.21%) also showed high rates of increase. In non-Gangnam areas, apartment prices in Mapo and Seongdong-gu (0.19%) and Yangcheon-gu (0.18%) rose significantly. The rate of increase also expanded in Nowon-gu (0.05%), Dobong-gu (0.07%), and Gangbuk-gu (0.03%), where the upward trend had somewhat slowed.
In Gangbuk-gu, a unit of 84㎡ in Kkumui Sup Harrington Place in Mia-dong was sold for 879 million KRW on the first floor on the 2nd of last month, nearly 150 million KRW higher than 730 million KRW in March this year.
However, as apartment transactions in Seoul have slowed and uncertainties have increased with recent fluctuations in mortgage loan interest rates, it remains to be seen whether this trend will continue.
An official from the real estate industry said, "The financial authorities recently limited the maximum term for calculating the housing mortgage loan limit from 50 years to 40 years and decided to suspend the acceptance of general-type special Bogeumjari loans," adding, "In a situation where there is a large gap between sellers' and buyers' asking prices and loans become difficult, it may be hard for the upward trend to continue."
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