Nationwide Apartment Listings Up 37.4% Compared to Last Year-End
Transaction Volume at 35,454 Units, Returning to Early Year Levels
Clear Downtrend in House Prices, Gangnam Prices Drop by 100 Million to 500 Million KRW
The real estate transaction market is rapidly cooling down. High interest rates, economic recession, and fatigue over the sharp rebound in housing prices are accumulating, causing home buying sentiment to shrink quickly. Due to the price perception gap between sellers and buyers, housing sales volume has dropped to the lowest level since last May, while listings are piling up to record highs.
The subscription market is no different. A polarization phenomenon is emerging as there is a difference in views between suppliers and demanders regarding the appropriate supply price. While pre-sale sites offered at prices lower than the surrounding market show fierce subscription competition rates, high-priced pre-sale projects are experiencing a surge in unsold units.
Nationwide Apartment Listings Reach 530,000 'Record High'... Transactions at 'Lowest' Since May
According to the Korea Real Estate Board on the 7th, the nationwide apartment transaction volume in October was recorded at 35,454 units. This is the lowest since May, when the rebound in Seoul apartment prices began this year, with 40,746 units.
Consumer sentiment in the housing market is also notably shrinking. According to the KB Real Estate Monthly Housing Price Trend, last month’s Seoul sales price expectation index dropped 15.4 points from the previous month to 82.8. This is the lowest level in eight months since March (78.0) this year.
The wait-and-see mood is deepening further. Listings continue to accumulate. According to the real estate big data platform ‘Asil’, as of the 6th, apartment listings across 17 cities and provinces nationwide totaled 534,706 units. This is the highest ever recorded since the company began tracking apartment listings.
Compared to 389,233 units registered at the end of last year, listings have increased by 37.4% (145,473 units) in less than a year, and by 5.7% (28,998 units) compared to one month ago (October 6). The number of listings is increasing daily regardless of Seoul, Gyeonggi Province, or other regions.
Given this situation, the downward trend in housing prices is clear. According to the Korea Real Estate Board, in the fourth week of November (as of November 27), nationwide apartment sale prices fell by 0.01% compared to the previous week. This marks the end of a 23-week nationwide price increase streak. Seoul apartment prices also stopped rising after 28 weeks. Following the decline in Gangnam in the third week of November, prices in Seocho also dropped in the fourth week.
According to the Ministry of Land, Infrastructure and Transport’s real transaction price disclosure system, over the past month, transactions showing price drops between 100 million and 500 million KRW have continued in areas such as Daechi Samsung in Daechi-dong, Gangnam-gu; Dogok Rexle in Dogok-dong; Raemian One Bailey in Banpo-dong, Seocho-gu; and Raemian Shin Banpo Palace in Jamwon-dong, Seocho-gu.
Especially in the No-Do-Gang (Nowon, Dobong, Gangbuk) areas, where many investment-purpose transactions were detected in recent months, the proportion of price drop transactions is even more pronounced. Recent transactions in Junggye Green and Sanggye Jugong in Junggye-dong, Nowon-gu, and Samik Ceramic in Dobong-gu were concluded at prices lowered by several tens of millions to around 300 million KRW.
Han Mundo, adjunct professor at Yonsei University Graduate School of Political Economy specializing in Finance and Real Estate, said, “The recent rebound in housing prices over the past few months was largely due to the effect of 50-year mortgage loans, but as these loans have been exhausted, the transaction market has stalled. Additionally, excessive listings and weakened buying sentiment following the price rebound make a downward adjustment inevitable for the time being.”
December Subscription Market Divided by Pre-sale Prices... Only 4 out of 9 Sites Successful
The subscription market has also cooled sharply. Until September, due to rising raw material costs and construction expenses, there was a strong perception that “today’s pre-sale price is the cheapest,” but the mood reversed from the fourth quarter. Amid prolonged high interest rates, a polarization phenomenon is strongly emerging in the subscription market, where only complexes with clear price gains attract subscription deposits.
According to the Subscription Home website, from the 1st to the 6th of this month, a total of 9 pre-sales took place, of which 5 sites remain unsold. Especially in the metropolitan area including Seoul, 2 out of 4 pre-sale sites experienced unsold units. In November as well, half of the 12 pre-sale sites in the metropolitan area, 6 sites, failed to meet subscription targets.
The success or failure of subscription deposit recruitment was determined by the pre-sale price. Sites priced lower than the surrounding market, where price gains were expected, attracted a large number of applicants, while high-priced sites were thoroughly ignored.
For example, on the 5th, Mapo Prugio Urban Peace recorded an average competition rate of 56 to 1 with 3,588 applicants for 64 units in the first priority subscription, where about 200 million KRW in price gains were expected compared to nearby complexes.
Other complexes that succeeded in subscriptions this month include ‘Osan Segyo 2 District Paragon’ in Gyeonggi Province, and ‘Wonbong Park Hildesheim’ and ‘Cheongju Gagyeong I-Park Complex 6’ in Cheongju, Chungbuk, all of which are subject to the pre-sale price ceiling system. Their pre-sale prices were lower than the surrounding market prices.
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