High-Intensity Regulations and COVID-19... Daegu Housing Prices Fall for the First Time in 25 Weeks

▲ Apartment Sale Price Index Change Rate by City and Province Nationwide for the 1st Week of March 2020 (Provided by Korea Real Estate Board)

[Asia Economy Reporter Chunhee Lee] Amid the government's stringent regulations and the impact of the novel coronavirus infection (COVID-19), the nationwide housing market has experienced a spring chill, with the rate of price increases slowing down. In particular, Daegu, where confirmed cases are concentrated, saw housing prices fall by 0.03%, marking the first decline in 25 weeks since September last year.

According to the Korea Real Estate Board's survey on the weekly apartment price trends nationwide for the first week of March 2020 (as of the 2nd), announced on the 5th, the sales prices rose by 0.16%, and the jeonse (long-term lease) prices increased by 0.06%. Compared to the previous week's sales price increase of 0.45% and jeonse price increase of 0.10%, the rate of increase appears to have somewhat contracted.

In particular, due to the spread of COVID-19, Daegu, which had seen a 0.03% increase in sales prices the previous week, experienced a 0.03% decline this week. This marks a shift to a downward trend for the first time in 25 weeks since the second week of September last year. Among the districts, Dalseong-gun, which had been showing a slight downward trend, recorded the largest decline of 0.16%, followed by Suseong-gu (-0.06%) and Dong-gu (-0.05%). A Korea Real Estate Board official stated, "This appears to be due to the market being significantly contracted by the rapid increase in COVID-19 confirmed cases."

In the metropolitan area, under the impact of the February 20 real estate measures, areas subject to concentrated regulations either saw slight declines or reduced rates of increase, while non-regulated areas showed an expansion in the rate of increase. This week, Seoul recorded the same 0.01% increase as the previous week. The Korea Real Estate Board analyzed, "While reconstruction and high-priced complexes continue to decline, mid- to low-priced complexes rose, maintaining last week's rate of increase."

Among the Gangnam 4 districts, all except Gangdong-gu (0.03%) showed a downward trend. In particular, Seocho-gu saw an expanded decline of 0.08% as some complexes appeared with urgent sale prices, and Gangnam-gu also recorded a 0.08% decline mainly due to reconstruction-related decreases. Songpa-gu fell by 0.06%. Among the 25 autonomous districts in Seoul, only Gangnam, Seocho, and Songpa districts saw housing prices fall compared to the previous week.

Suwon City, the main target of the February 20 measures, saw its rate of increase halved. Apartment prices in Suwon, which rose 1.56% last week, increased by only 0.78% this week. Paldal-gu (1.06%), Gwonseon-gu (0.97%), and Yeongtong-gu (0.73%) all saw reduced rates of increase compared to the previous week. However, the cumulative housing price increase rates for these three areas this year have already recorded high increases of 11-12%.

The nationwide weekly apartment jeonse prices also saw a slight reduction in the rate of increase compared to the previous week. However, Seoul's increase rate remained at 0.04%, the same as the previous week. Jeonse prices rose across all 25 autonomous districts in Seoul. In particular, Guro-gu and Dongjak-gu recorded the largest increases of 0.11%. Guro-gu showed an upward trend mainly in school districts and areas near subway stations, with sales prices also rising by 0.08%.

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