Weekly Apartment Price Trends for the First Week of This Month
Seoul Apartment Jeonse Prices Down 0.01%
Gangnam Also Turns Downward, Increased Decline in Seongdong and Dongdaemun Districts
"Temporary Phenomenon, Jeonse Prices Will Eventually Rise Again"
The jeonse prices of apartments in Seoul have turned downward for the first time in 86 weeks. Experts analyzed this pause after a long period of increase as a temporary breather. They judged that prices are likely to rise again due to a decrease in housing move-in volumes.
Seoul Apartment Jeonse Prices Fall for the First Time in 86 Weeks... Down 0.01% Compared to Last Week
According to the 'Weekly Apartment Price Trend' released by the Korea Real Estate Board on the 9th, Seoul apartment jeonse prices fell by 0.01% compared to the previous week in the first week of this month. Jeonse prices had risen for 82 consecutive weeks since May last year. After showing no change (0.00%) for the recent 3 weeks, they turned downward.
Among the 25 districts in Seoul, jeonse prices fell in 12 areas including Gangnam-gu, Seongdong-gu, and Dongdaemun-gu. Among them, Gangnam-gu's jeonse prices had risen for 44 consecutive weeks from March last year until last week, then fell by 0.01%.
The largest decline was in Seongdong-gu (-0.09%), which dropped more sharply than the previous week (-0.05%). Seongdong-gu's jeonse prices had risen for 74 weeks since the third week of June 2023. After two weeks of no change, prices have been falling for six consecutive weeks. Dongdaemun-gu (-0.04%→-0.08%) also increased its decline, following Seongdong-gu. Jeonse prices there had risen since the second week of July 2023 but have been falling for seven consecutive weeks.
The Real Estate Board explained, "Although some rising contracts were made mainly in preferred school districts, the increase in move-in volumes caused jeonse prices to fall mainly in older buildings, leading to the downward turn."
On the 24th, as apartment transactions shrink due to loan regulations and other factors, listings continue to accumulate. A real estate agency in Gangnam, Seoul, has flyers for sale and jeonse listings posted. Photo by Kang Jin-hyung
The number of jeonse contracts is also decreasing. According to the Seoul Real Estate Information Plaza, 8,855 jeonse contracts were made in Seoul in November last year as of the 9th. This is over 4,000 fewer than the 13,119 contracts in November the previous year. Seoul's jeonse contracts had maintained over 10,000 per month since September 2021 (9,803 contracts), but fell below 10,000 for the first time in three years with 8,953 contracts in September last year. After recording 10,757 contracts in October last year, the number dropped below 10,000 in November last year.
The number of apartment jeonse contracts in Gangnam-gu was 675 in November last year, about half of 1,281 contracts in the same month the previous year. Seongdong-gu decreased from 526 to 327, and Dongdaemun-gu from 354 to 230 during the same period.
"Jeonse Prices Rise Due to Supply Shortage and Stable Sale Prices"
Experts analyzed that this decline in jeonse prices is a temporary phenomenon. Ham Young-jin, head of the Real Estate Research Lab at Woori Bank, said, "The downward trend in jeonse prices will not last long." He added, "With accumulated decreases in permits and construction starts, move-in volumes are shrinking, so Seoul's jeonse prices are likely to rise again. When supply is insufficient and sale prices are stable, jeonse demand increases. Currently, the real estate market is in its winter off-season, and jeonse prices fell because large apartment complexes in some areas like Seongdong-gu and Dongdaemun-gu are about to have move-ins."
According to real estate information company Real Estate R114, the number of apartment move-ins in Seoul this year is 30,213 households. Until 2020, move-in volumes were 44,529 households, but since then, they have decreased to around 20,000 to 30,000 households.
Yoon Ji-hae, research team leader at Real Estate R114, said, "Since jeonse prices have risen for a long time, this is just a temporary breather. As supply shortage issues emerge in the second half of this year, jeonse prices will rise." She explained, "In Gangnam-gu, jeonse prices only slightly fell, and in Seongdong and Dongdaemun-gu, the jeonse prices of complexes about to have move-ins (such as Seoul Forest I-Park Riverforet) are high, causing the jeonse prices of already built complexes to fall."
Seoul Walking Column - A residential complex in downtown Seoul where apartments and houses coexist. Photo by Yongjun Cho jun21@
The jeonse prices of move-in complexes in Seongdong and Dongdaemun-gu are higher than the average prices in these areas. According to Naver Pay Real Estate, the jeonse asking price for a 59㎡ unit in 'Seoul Forest I-Park Riverforet Phase 1' in Seongsu-dong, Seongdong-gu, which is moving in this month, ranges from 950 million to 1.3 billion KRW. The average apartment jeonse price in Seongdong-gu was 703.96 million KRW as of November last year (Seoul Real Estate Information Plaza).
In Dongdaemun-gu, the jeonse asking price for the same size unit in 'Raemian La Grande' in Imun-dong, moving in this month, is about 500 million to 580 million KRW, which is over 90 million KRW higher than the average jeonse price (490.84 million KRW).
Meanwhile, nationwide apartment jeonse prices remain unchanged (0.00%) following last week. Gyeonggi Province rose 0.01% compared to the previous week, but Incheon fell 0.04%, keeping the metropolitan area stable. Jeonse price declines in local areas have stopped (-0.01%→0.00%). The five major metropolitan cities saw jeonse prices fall 0.01% for two consecutive weeks.
Seoul apartment sale prices are also stable. The metropolitan area saw a 0.02% decrease compared to the previous week, with Gyeonggi (-0.01%) and Incheon (-0.07%) showing downward trends. Nationwide apartment prices also fell 0.03%, with local areas (-0.04%→-0.05%) and the five major metropolitan cities (-0.05%→-0.06%) experiencing larger declines.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
