Korea Real Estate Board Weekly Apartment Price Trends
Preferred Areas That Soared Last Year Now Leading the Downturn
Seoul Apartment Prices Up 0.11%...Pace of Increase Slowing
President Lee Mentions Falling Sale and Jeonse Prices at Senior Secretaries' Meeting
Statistics show that apartment prices in the three Gangnam districts of Seoul and in Yongsan-gu fell compared with a week earlier. These areas led the rise in Seoul housing prices last year, and this is the first time in about two years that they have turned downward simultaneously in the weekly data. Despite strict lending regulations and transaction restrictions last year, prices had continued to rise, but as market conditions for multiple-home owners have turned unfavorable, the upward trend has halted and early signs of a downturn are emerging.
According to the weekly apartment price trend data released by the Korea Real Estate Board on the 26th, as of the fourth week of this month (the 23rd), apartment sale prices in Seoul rose 0.11% from a week earlier. After the late-January growth rate reached 0.31%, the weekly increase has been shrinking this month, to 0.27% in the first week of February, 0.22% in the second week, and 0.15% in the third week.
While the overall pace of increase in Seoul has slowed, the fact that apartment prices in the three Gangnam districts and Yongsan-gu have actually turned downward stands out. Prices in Gangnam-gu fell 0.06%, in Seocho-gu 0.02%, and in Songpa-gu 0.03%. Yongsan-gu recorded a 0.01% decline. This is the first time since the first week of February 2024 (the 5th) that all four districts have posted negative figures together.
Apartment sale listings such as Geupma and Chogeupma are displayed at a real estate brokerage office in Gangnam-gu, Seoul. Yonhap News
In Gangnam-gu, the decline was particularly notable in Daechi-dong and Cheongdam-dong, and in Songpa-gu in Bangi-dong and Sincheon-dong. In Yongsan-gu, older apartment complexes in Hannam-dong and Ichon-dong led the drop. The Korea Real Estate Board stated, "There is a mixed trend by area and complex, with some complexes seeing transactions concluded at lower asking prices," adding, "Overall prices in Seoul still rose because demand continues to concentrate on large, highly favored complexes and those near subway stations."
The three Gangnam districts and Yongsan-gu are cited as the areas that led the rise in Seoul housing prices last year. Based on Korea Real Estate Board data, overall apartment prices in Seoul rose about 8.71% last year. By district, Songpa-gu climbed 20.92%, the highest increase among the city’s 25 autonomous districts. Gangnam-gu (13.59%), Seocho-gu (14.11%), and Yongsan-gu (13.21%) also exceeded the average. Amid long-standing concerns over supply shortages, the lifting and re-designation of land transaction permit zones last year, combined with various regulatory measures that intensified supply-demand instability, pushed housing prices higher.
Recently, the mood has shifted. President Lee Jaemyung has pledged to restore the heavier capital gains tax on multiple-home owners under the banner of "normalizing the real estate market," and has been sending repeated messages that loan benefits will also be withdrawn. The market expects that if the heavier capital gains tax on multiple-home owners actually takes effect starting in May, tax burdens will surge, prompting some owners to try to sell in advance, even by cutting prices.
Presiding over a senior secretaries' meeting at the Blue House on this day, President Lee said, "We are seeing a significant drop in housing prices in Seoul, and the number of homes for sale is also increasing noticeably," adding, "Just as the normalization of the capital market, which once seemed impossible, is becoming a reality, the real estate market can also move toward normalization from its current abnormal state." He went on to say, "I am told that the rate of increase in jeonse prices is also slowing," and added, "We must firmly move toward 'an economy for all' that normalizes the real estate market and brings real improvements to people's lives."
On top of this, since the government has officially set in motion a reform of property holding taxes, the tax burden on multiple-home owners is likely to increase even if they do not sell. Although the authorities have not yet presented detailed plans for the tax overhaul, a general direction has been set to lower transaction taxes (acquisition tax) while raising holding taxes (property tax and comprehensive real estate holding tax). Tax benefits from the special long-term holding deduction for non-residents are also expected to be reduced.
In Seoul, with the exception of districts such as Eunpyeong-gu, Yangcheon-gu, and Geumcheon-gu, all areas saw their weekly rate of increase slow compared with the previous week. Gwacheon continued to decline this week (-0.10%) following last week, with the drop widening. Jeonse prices are relatively stable. This week, the increase in Seoul apartment jeonse prices was 0.08%, the same level as a week earlier.
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