Seoul and Daegu See Slower Housing Price Growth in March... Gyeonggi-do Continues to Rise

Reflecting COVID-19 Impact... Continued Price Decline in Gangnam Area
Price Increase Rate Drops in Major Metropolitan Cities like Daegu and Ulsan
Gyeonggi and Incheon See Larger Price Increase, 'Balloon Effect'

[Asia Economy Reporter Moon Jiwon] Due to the impact of the novel coronavirus infection (COVID-19), the rate of increase in housing prices in major cities nationwide, including Seoul and Daegu, has sharply declined. However, in Gyeonggi Province, the rate of increase grew larger, supported by a 'balloon effect' in some areas.

According to the "March Nationwide Housing Price Trends" survey released by the Korea Real Estate Board on the 1st, housing prices in Seoul rose by 0.13% compared to the previous month (0.15%), showing a decrease in the rate of increase.

In Seoul, weakness was particularly noticeable in 11 districts south of the Han River. Gangnam (-0.20%), Songpa (-0.17%), and Seocho (-0.13%) districts saw an expanded decline mainly in ultra-high-end complexes such as reconstruction projects, due to government regulations including loan restrictions and increased holding tax burdens.

However, Guro District (0.26%) saw price increases mainly in station areas such as Sindorim, Guro, and Gaebong-dong, and Dongjak District (0.19%) experienced price rises due to residential environment improvements from redevelopment projects and transportation benefits (such as the Sinansan Line).

In northern Seoul, Nowon (0.38%), Dobong (0.28%), and Gangbuk District (0.28%) saw increases centered on small and low-priced complexes, large new town complexes with good residential conditions, and areas with development benefits. Mapo District (0.25%) continued its upward trend due to redevelopment relocations (Gongdeok 1 District), but the rate of increase narrowed due to price declines in popular high-end apartments.

Daegu, which suffered significant damage from COVID-19, saw housing prices rise by only 0.06% compared to the previous month (0.29%). Other metropolitan cities such as Busan (0.03%) and Gwangju (0.08%) also experienced reduced rates of increase.

On the other hand, the metropolitan area saw a larger increase (0.93%) than the previous month (0.51%). The Korea Real Estate Board analyzed, "In Seoul, government regulations aimed at stabilizing the housing market and the impact of COVID-19 spread have dampened buying sentiment, reducing the rate of increase. However, in Gyeonggi and Incheon, areas with development benefits such as improved transportation conditions, expanded convenience facilities, and redevelopment projects saw price increases."

Additionally, Sejong (4.24%) saw an expanded rate of increase due to population inflow and a decrease in housing supply, and Daejeon (1.30%) experienced a wider increase due to redevelopment projects and expectations of attracting innovation cities.

[Image source=Yonhap News]

Last month, the jeonse (long-term lease) prices of housing in Seoul rose by 0.12%, narrowing the rate of increase compared to the previous month (0.16%).

Gangdong District (0.11%) saw jeonse prices turn to an upward trend due to the depletion of new lease supply, while Seocho (0.27%), Gangnam (0.24%), Songpa (0.07%), Dongjak (0.14%), and Yeongdeungpo (0.11%) continued their upward trend due to proximity to workplaces and relocation demand from redevelopment projects, though the rate of increase slightly narrowed. Yangcheon District (-0.06%) shifted to a downward trend due to the impact of new housing supply.

Seongdong District (0.21%) saw increases mainly in large complexes in Geumho and Haengdang-dong, and Gangbuk District (0.18%) rose mainly in Mia New Town. Mapo District (0.26%) increased mainly in station areas such as Daeheung and Changjeon-dong, and Nowon District (0.02%) rose mainly in Junggye and Hagye-dong, though the overall rate of increase narrowed.

Gyeonggi Province (0.32%) continued its upward trend despite some shortage of listings, but the rate of increase decreased, while Incheon (0.49%) maintained its upward trend mainly in areas with development benefits or good residential conditions such as school districts and convenience facilities.

In particular, Sejong's jeonse prices rose by 2.63% compared to the previous month (0.86%), interpreted as an effect of decreased new housing supply. Daejeon (0.72%) saw an expanded rate of increase mainly in areas with excellent school districts and transportation.

Meanwhile, the statistics from the Korea Real Estate Board reflect survey results from February 11 to March 9.

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