Due to the impact of COVID-19, Daegu housing prices fall for 2 consecutive weeks... Capital area sees balloon effect with regional increases

▲ Apartment Sale Price Index Change Rate by Province in the 2nd Week of March 2020 (Provided by Korea Real Estate Board)

[Asia Economy Reporter Lee Chun-hee] Amid the government's stringent regulations and the impact of the novel coronavirus disease (COVID-19), nationwide housing prices this week only managed to maintain a slight upward trend. In particular, Daegu, which was hit hard by the resurgence of COVID-19, saw housing prices fall by 0.04% this week, marking a decline for the second consecutive week. Daegu's housing prices had shown a downward trend for the first time in 25 weeks last week since September of last year.

The Korea Real Estate Board announced on the 12th that, based on the nationwide weekly apartment price trends for the second week of March 2020 (as of the 9th), sale prices rose by 0.16% and jeonse prices increased by 0.07%. These increases are similar to the previous week's rise of 0.16% in sale prices and 0.06% in jeonse prices.

In particular, Daegu, where sale prices had fallen by 0.03% the previous week due to the spread of COVID-19, saw the decline widen slightly to 0.04% this week. After shifting to a downward trend last week for the first time in 25 weeks, the decline continued for two consecutive weeks. Across regions, most cities showed either stable or declining trends. A Korea Real Estate Board official analyzed, "This appears to be due to a contraction in local transaction activities and an expansion of cautious sentiment caused by efforts to contain the spread of COVID-19."

In the Seoul metropolitan area, amid the effects of the February 20 real estate measures, areas under concentrated regulation maintained a downward trend, while relatively less regulated areas saw price increases.

This week, apartment prices in Seoul rose by 0.02%, a slight increase compared to the 0.01% rise the previous week. The Korea Real Estate Board interpreted, "Despite both buyer and seller sentiment being subdued, some mid- to low-priced complexes in certain areas saw price increases. However, high-priced complexes in the Gangnam area and reconstruction complexes, which had previously driven price increases, continue to experience a decline due to reduced buying demand, falling asking prices, and transactions mainly through urgent sales."

Among the four Gangnam districts, all except Gangdong-gu (0.02%) showed a downward trend this week. However, the decline in housing prices in Gangnam and Seocho-gu, which fell by 0.08% last week, narrowed to 0.06%. A Korea Real Estate Board official analyzed, "While high-end properties such as medium- to large-sized homes continued to decline, smaller units saw a slight reduction in the rate of decline following urgent sales."

In other parts of Seoul, price increases continued mainly in areas with favorable conditions and complexes near subway stations. The districts known as 'Nodogang' and 'Geumgwan-gu'?Nowon, Dobong, Gangbuk, and Guro-gu?showed significant increases. Nowon-gu and Gangbuk-gu rose by 0.09% this week, marking the highest increase in Seoul.

Suwon City, a key target of the February 20 measures, also saw a slight reduction in the rate of increase this week. Apartment prices in Suwon, which rose 1.56% in the last week of February, increased by 0.78% last week and 0.76% this week. The previous price increases were influenced by transportation improvements, expanded convenience facilities, and redevelopment projects. Although the upward trend continued, the expansion of regulated areas under the February 20 measures, short-term price surge fatigue, and the COVID-19 situation appear to have reduced the rate of increase.

However, cities like Guri (1.30%) and Osan (1.95%), which were not affected by the measures, showed significant increases supported by transportation benefits and steady demand for new constructions.

▲ Nationwide Apartment Sale and Jeonse Price Index Change Rate for the 2nd Week of March 2020 (Provided by Korea Appraisal Board)

Nationwide weekly apartment jeonse prices saw a slightly larger increase compared to the previous week. However, Seoul's growth rate remained steady at 0.04%, the same as the previous week. Among Seoul's 25 autonomous districts, all except Yangcheon-gu (-0.04%) showed an upward trend.

In particular, Guro-gu recorded the largest increase at 0.09%. Guro-gu's rise was driven mainly by complexes near subway stations in Sindorim and Guro-dong, with the sale price index also increasing by 0.08%. Regarding the decline in jeonse prices in Yangcheon-gu, the Korea Real Estate Board attributed it to the move-in of 3,045 households into the Mokdong Central I-Park Weave complex starting this month.

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