Apartment Prices in Gangnam 3 Districts Fall Sharply... High-End Complexes Face Cold Winds

Gangnam 4 Districts Apartments Turn to Decline After 33 Weeks
Nowon and Gangbuk See Larger Increases... 'Balloon Effect'
Seoul Jeonse Prices Slow in Growth... Gangdong District Declines

A view of nearby apartment complexes from Lotte World Tower in Jamsil, Songpa-gu, Seoul. (Photo by Yonhap News)

[Asia Economy Reporter Moon Jiwon] Apartment prices in Seoul's Gangnam 3 districts (Gangnam, Seocho, Songpa), which had turned to a downward trend last week after 7 months, have fallen further. Accordingly, apartment prices in the southeastern region of Seoul also returned to a downward trend for the first time since June last year. This is analyzed as the full-scale effect of the December 16 real estate measures, which focused on high-priced housing.

According to the 'Weekly Apartment Price Trend for the 4th week of January 2020' data from the Korea Real Estate Board on the 30th, apartment prices in Gangnam-gu fell by 0.03% as of the 27th, compared to the previous week (-0.02%), increasing the decline. Apartment prices in Seocho-gu and Songpa-gu also fell by 0.04% during the same period, expanding the decline compared to the previous week (-0.01%).

Apartment prices in the 11 districts south of the Han River rose by 0.01%, but the Gangnam 4 districts, including Gangdong-gu, fell by 0.03%. It is the first time in 33 weeks since the second week of June last year that apartment prices in the Gangnam 4 districts have fallen overall.

In Gangdong-gu, prices rose by 0.02%, mainly in some complexes in Dunchon and Gildong, but the increase narrowed compared to the previous week (0.03%). The Korea Real Estate Board explained, "In Gangnam, Songpa, and Seocho districts, the decline widened as some listings fell not only in high-priced major complexes such as reconstruction areas but also in complexes that had maintained a stable trend."

On the other hand, areas with relatively affordable housing saw a greater price increase due to the 'balloon effect.' Nowon-gu (0.05%) increased mainly in Wolgye and Junggye-dong, which have school district demand, expanding the rise, and Gangbuk-gu (0.06%) and Dongdaemun-gu (0.05%) also saw slight price increases compared to the previous week.

However, overall in Seoul, the increase was limited to 0.02% compared to the previous week, marking the sixth consecutive week of slowing growth. The decline in high-priced complexes in Seoul seems to have slowed the 'gap filling' by mid- to low-priced complexes in nearby and outer areas. The Korea Real Estate Board explained, "The effect of the December 16 measures and the Lunar New Year holiday have led to a continued wait-and-see stance."

By city and province, prices rose in Sejong (0.44%), Daejeon (0.39%), Gyeonggi (0.20%), Ulsan (0.11%), Incheon (0.07%), Gyeongnam (0.06%), Daegu (0.05%), remained stable in Chungbuk (0.00%), and fell in Gangwon (-0.04%), Jeju (-0.03%), and Gyeongbuk (-0.01%).

(Data from Korea Real Estate Board)

Seoul apartment jeonse prices rose by 0.05%, but the rate of increase continued to slow. The upward trend continued mainly in areas close to workplaces and subway stations or relatively affordable areas, but the rise narrowed due to reduced transactions during the Lunar New Year holiday and seasonal off-season effects.

In Seocho-gu (0.16%), the jeonse price increase expanded mainly in new buildings in Banpo, Seocho, and Bangbae-dong; in Gangnam-gu (0.04%), it rose mainly in Jagok and Irwon-dong; and in Songpa-gu (0.02%), mainly in Jangji and Munjeong-dong, but the increase narrowed.

Notably, Gangdong-gu (-0.03%) was the only district in Seoul where jeonse prices turned to a decline, influenced by new supply such as Godeok Arteon. Yangcheon (0.01%) and Gangseo-gu (0.01%) also saw a narrowing of the increase due to seasonal off-season and new supply.

North of the Han River, Mapo-gu (0.10%) rose mainly in subway station complexes in Yeomni and Sangam-dong, and Seongbuk-gu (0.09%) rose mainly in large complexes in Jongam and Donam-dong, but the rate of increase slowed.

Meanwhile, Gyeonggi Province, where apartment price growth had stalled last week, rose by 0.2%, slightly expanding the increase.

In Suwon, Yeongtong-gu (1.20%) rose mainly near Mangpo Station; Suwon Gwonseon-gu (1.09%) rose due to transportation benefits; and Suwon Paldal-gu (0.84%) rose mainly near Hwaseo Station.

Also, Suwon Jangan-gu (0.43%) rose mainly in older complexes in Jeongja-dong and large complexes in Yuljeon-dong; Yongin Suji-gu (0.81%) rose mainly in Pungdeokcheon-dong, which has remodeling and other benefits; and Yongin Giheung-gu (0.52%) rose mainly near Guseong Station and in Gugaldong, where residential environment improvement expectations exist.

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