Apartment Prices in Gangnam 3 Districts Turn Downward... Government's Warning Halts Rising Trend

Price Drop in Over 30 Houses in Gangnam Area... Impact of Regulations
Seoul Apartment Price Increase Also Slows for 5 Consecutive Weeks

[Image source=Yonhap News]

[Asia Economy Reporter Moon Jiwon] Apartment prices in the Gangnam 3 districts (Gangnam, Seocho, and Songpa districts) have turned to a downward trend for the first time since June last year. The slowdown in the rise of apartment prices in Seoul has also continued for five consecutive weeks. Analysts suggest that the real estate market is freezing as the effects of the December 16 real estate measures continue.

According to the "Weekly Apartment Price Trends Nationwide for the 3rd Week of January 2020" by the Korea Real Estate Board on the 23rd, apartment prices in Gangnam-gu, Seocho-gu, and Songpa-gu fell by 0.02%, 0.01%, and 0.01%, respectively, as of the 20th.

Gangnam-gu shifted to a decline for the first time in 33 weeks since the second week of June last year, Songpa-gu for the first time in 32 weeks since the third week of June last year, and Seocho-gu for the first time in 31 weeks since the fourth week of June last year.

It appears that the surge of urgent sale properties in reconstruction complexes in the Gangnam area of Seoul after the announcement of the December 16 real estate measures influenced this trend. In fact, urgent sale properties in reconstruction complexes such as Banpo-dong Jugong Complex 1 in Seocho-gu and Jamsil-dong Jugong Complex 5 in Songpa-gu dropped by several hundred million won compared to the end of last year.

The Korea Real Estate Board analyzed, "In Gangnam, Songpa, and Seocho districts, urgent sale properties appeared not only in reconstruction complexes but also in some popular new buildings, leading all to shift to a downward trend."

Gangdong-gu saw a slight price increase (0.03%) mainly in small to medium-sized units in Amsa and Seongnae-dong, but the rate of increase narrowed. Other districts such as Yangcheon (0.05%), Dongjak (0.03%), and Gangseo-gu (0.02%) also experienced a slowdown in price increases.

As apartment prices in the Gangnam 3 districts turned downward, the rate of price increase in Seoul further slowed. According to the Korea Real Estate Board, the metropolitan area rose by 0.12%, down from 0.13% the previous week, and Seoul rose by 0.03%, down from 0.04% the previous week, indicating a reduced rate of increase.

North of the Han River, Mapo (0.09%) and Jongno-gu (0.06%) saw price increases due to good accessibility to workplaces, Eunpyeong-gu (0.06%) rose mainly in new and semi-new buildings in Bulgwang, Nokbeon, and Eungam-dong, and Gangbuk-gu (0.04%) increased mainly in large complexes in Mia-dong. However, all 14 districts either saw a reduced rate of increase or maintained their previous levels.

By city/province, Daejeon (0.52%), Sejong (0.34%), Gyeonggi (0.19%), Daegu (0.18%), Ulsan (0.10%), Busan (0.04%), and Seoul (0.03%) experienced price increases, while Jeju (-0.08%), Chungbuk (-0.08%), Gyeongbuk (-0.06%), and Gangwon (-0.06%) saw declines.

Nationwide apartment sale prices rose by 0.09% as of the 20th compared to the previous week, maintaining the rate of increase.

Seoul apartment jeonse (long-term lease) prices rose by 0.10%, slightly down from 0.11% the previous week.

The Korea Real Estate Board explained, "Prices increased mainly in complexes near downtown stations with easy access to business districts or popular school districts, but overall in Seoul, the rate of increase narrowed due to factors such as increased supply in the first quarter and the seasonal off-season."

However, in the Gangnam 4 districts, Songpa-gu's jeonse prices rose by 0.20%, up from 0.08% the previous week, expanding the rate of increase. Gangnam (0.15%) and Seocho-gu (0.15%) saw increases mainly in major school districts such as Daechi and Banpo, but the rate of increase narrowed.

Yangcheon-gu (0.30%) rose mainly in Mokdong and Sinjeong-dong, which have good educational environments, but the rate of increase narrowed compared to the previous week due to new supply such as Mokdong Central I-Park Weave.

Meanwhile, Gyeonggi-do maintained a price increase trend centered on major areas. According to the Korea Real Estate Board, Suwon Gwonseon-gu (1.52%) rose mainly in complexes with transportation benefits, and Suwon Yeongtong-gu (1.02%) increased mainly in old downtown areas such as Yeongtong and Maetan-dong.

Suwon Paldal-gu (0.78%) rose mainly in complexes near Hwaseo Station, Suwon Jangan-gu (0.43%) increased mainly in older complexes in Songjuk and Cheoncheon-dong and highly preferred complexes in Yuljeon-dong, and Yongin Suji (0.65%) and Giheung-gu (0.50%) rose due to expectations of improved residential environments.

This content was produced with the assistance of AI translation services.