Weekly Apartment Price Trends by Korea Real Estate Board
Seoul's apartment price growth slows for third week
Lending regulations and DSR phase 3 dampen buying sentiment
Price increases in major districts and suburbs also lose momentum
Jeonse prices in Seoul rise at a slower pace amid mixed regional trends
This week, the rate of increase in apartment prices in Seoul was 0.19%, lower than the previous week's 0.29%. For the third consecutive week, the weekly rate of increase has slowed. This trend is attributed to a cooling in buying sentiment following the immediate implementation of lending regulations starting June 28.
According to the apartment price trend survey for the second week of July, released by Korea Real Estate Board on the 17th (as of the 14th), apartment prices nationwide rose by 0.02%, while the Seoul metropolitan area saw an increase of 0.07%. Both figures represent a slowdown compared to the previous week. In non-metropolitan regions, prices fell by 0.02%, with the rate of decline narrowing. Apartment prices in Seoul have remained on an upward trend for 24 consecutive weeks, but the pace has become noticeably more subdued. Just a month ago, prices were soaring, but now the momentum has slowed.
Primarily, the lending regulations have made it more difficult to use leverage, prompting both sellers and buyers to take a wait-and-see approach. Additionally, since July, the implementation of the third phase of the Debt Service Ratio (DSR) has reduced loan limits, which previously led to a last-minute surge in buying and pushed up home prices. Now that this effect has dissipated, the slowdown has become more pronounced.
By district in Seoul, 23 out of 25 districts saw a lower rate of increase compared to the previous week, with only Jung-gu and Dobong-gu as exceptions. Seongdong-gu, which led the upward trend in June, saw its weekly increase drop from 0.99% in the third week of June to 0.89%, then 0.70%, and finally 0.45%, effectively halving. Mapo-gu also saw a decrease from 0.98% to 0.85%, then 0.60%, and finally 0.24% over the same period. The three Gangnam districts, which had previously experienced sharp increases, showed a similar pattern.
In areas adjacent to Seoul, such as Gwacheon and Bundang, which had been experiencing an upward trend due to the so-called "balloon effect," the rate of increase also slowed. The Korea Real Estate Board explained, "Although some new developments and complexes near subway stations continue to see price increases, the overall rate of increase in Seoul has narrowed as buyers have become more cautious and transactions have decreased."
Jeonse prices in Seoul also rose by 0.08% compared to the previous week, a slower pace than the previous week's 0.13%. Nationwide, jeonse prices increased by 0.02%, similar to the previous week's 0.01%. The Korea Real Estate Board noted, "In some areas affected by new housing supply, jeonse prices have fallen, resulting in a mixed pattern of increases and decreases by region and complex. However, in preferred complexes with good living conditions, a shortage of listings has led to continued overall increases in Seoul."
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