Only Nowon, Dobong, Gangbuk, and Guro Among 25 Districts Show Decline
Seoul's Sales Supply-Demand Index Lowest in 5 Regions
This year, apartment prices in the 'No·Do·Gang (Nowon·Dobong·Gangbuk)' area, which was the last to join the housing price recovery trend, are rapidly declining. Since No·Do·Gang is a preferred buying area for younger generations who relatively lack cash reserves, the weakening buying demand is attributed to the impact of high interest rates and concerns over further price drops. It appears that housing prices in the outskirts of Seoul are taking a direct hit due to recession fears and prolonged high interest rates.
According to the Korea Real Estate Board on the 21st, as of the 13th of this month (second week), apartment prices in Seoul rose by 0.05% compared to the previous week, maintaining the same rate of increase as the previous week. However, sales prices in Nowon-gu and Gangbuk-gu fell by 0.01%, showing a decline for two consecutive weeks. Gangbuk-gu saw a -0.01% drop in the fourth week of October, making it the first among the 25 districts to experience a price decrease. Although it rebounded a week later, it declined again, showing a weak trend. Dobong-gu stopped its upward trend and shifted to a flat trend. The only areas in Seoul where apartment prices fell last week were Guro-gu and the No·Do·Gang areas.
When Seoul's housing prices began to recover this year, No·Do·Gang was the last to join this trend. The Gangnam 3 districts?Gangnam-gu, Seocho-gu, and Songpa-gu?were the first to turn upward, followed by Mapo and Yongsan-gu, which showed an upward trend starting in May. Most areas in Seoul, including Seongdong, began to show a gradual recovery in housing prices from June. Gangbuk-gu and Nowon-gu only saw a rebound in the third week of July. However, due to recent factors such as the end of the special home loan program and the maintenance of high interest rates, market sentiment has cooled, and housing prices in the outskirts of Seoul, such as No·Do·Gang, are being hit first.
The market believes that buying demand has weakened because these areas, mainly purchased by younger buyers, face increased financial burdens due to the government's strengthened loan regulations. In fact, the sales supply-demand index, which quantifies the ratio of demand to supply, recorded the lowest at 83.4 in the northeastern region, which includes No·Do·Gang. This is similar to the level in Daegu (83.2).
Yeokyung Lee, Senior Researcher at Real Estate R114 Research Team, said, "Buyers are likely to be discouraged mainly in areas sensitive to high interest rates and loan regulation issues. Although there are areas with positive factors such as reconstruction, currently, the market sentiment is more influenced by recent economic conditions than by expectations from development projects."
The decline in actual transaction prices is also evident. An 84㎡ unit in Mia-dong Samsung Raemian Trivera 2 Complex was traded last month for 820 million KRW, down 50 million KRW from the previous transaction price of 870 million KRW. An 84㎡ unit in SK Bukhan Mountain City was traded for over 700 million KRW in July, but in October, it was traded in the mid-600 million KRW range, such as 640 million KRW (21st floor) and 660 million KRW (3rd floor).
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