Seoul Apartment Prices Fall for the First Time in 39 Weeks... Housing Price Decline Begins in Earnest

Price Decline Not Only in Gangnam Area but Also Major Gangbuk Regions
COVID-19-Induced Housing Price Drop Expected to Accelerate
Seoul Housing Prices Fall for the First Time Since July
Gyeonggi, Incheon, Sejong, and Daejeon All 'Stagnant'

[Image source=Yonhap News]

[Asia Economy Reporter Moon Jiwon] Apartment prices in Seoul have turned to a downward trend for the first time in 39 weeks since July last year.

Price declines were detected not only in the Gangnam area, where there has been a surge in urgent sales, but also in various parts of Gangbuk. Analysts say that the 'housing price decline' triggered by the spread of the novel coronavirus infection (COVID-19) is now in full swing.

According to the "Weekly Apartment Price Trend Survey for the 5th week of March 2020" released by the Korea Real Estate Board on the 2nd, apartment prices in Seoul fell by 0.02% compared to the previous week as of the 30th of last month. This is the first time in eight months since the first week of July last year that housing prices in Seoul have declined.

Seoul apartment prices gradually narrowed their rate of increase after the December 16, 2019 measures, then maintained a flat trend with zero growth for two consecutive weeks. The Korea Real Estate Board explained, "Due to the domestic and international economic uncertainties triggered by the COVID-19 crisis, strengthened proof of funding sources, and increased holding tax burdens, buyer sentiment has been greatly weakened," adding, "Following the Gangnam area, prices also declined in representative areas of Gangbuk, leading to an overall downward trend in Seoul."

By autonomous district, Gangnam (-0.16%), Seocho (-0.17%), and Songpa (-0.12%) saw an expanded decline mainly in apartment complexes priced over 1.5 billion KRW, where holding tax burdens increased. Gangdong (-0.01%) also turned to a decline as listings increased mainly in medium to large complexes. Most districts south of the Han River saw either a reduction in the rate of increase or maintained their price levels.

Districts north of the Han River also showed clear weakness. Mapo (-0.02%), Yongsan (-0.01%), and Seongdong (-0.01%) turned to a downward trend as listings with lowered asking prices appeared in major complexes. Meanwhile, Nowon (0.04%), Dobong (0.05%), and Gangbuk (0.05%), which had development prospects and relative low-price advantages, saw their rate of increase shrink due to the price declines in major Seoul areas and complexes.

In fact, Jongno, Jung, Yongsan, Seongdong, Gwangjin, Seongbuk, Mapo, and Gangdong districts in Seoul turned to a downward trend for the first time this week.

The housing price rise in Gyeonggi Province and Incheon also slowed due to the economic downturn caused by COVID-19. Incheon rose by 0.34%, down from 0.42% the previous week. Namdong-gu (0.47%) saw price increases mainly in station-area complexes in Guwol and Ganseok-dong, where expectations for transportation network expansion exist, and Yeonsu-gu (0.43%) rose mainly in Songdo and Yeonsu-dong, influenced by transportation benefits and a strong subscription market. Seo-gu (0.30%) increased centered on Seoknam-dong, which benefits from the Line 7 extension, and Cheongna New Town, which has improved accessibility to Seoul.

Gyeonggi Province rose by 0.19%, down from 0.28% the previous week, also showing a reduced rate of increase. Due to expanded regulations and concerns about an economic downturn caused by COVID-19, buyer sentiment weakened, leading to a reduced rate of increase across Gyeonggi Province. Yongin City (0.11%) saw a slowdown mainly in Suji-gu (0.12%), and Suwon City (0.15%) saw a slowdown mainly in Gwonseon-gu (0.22%).

Additionally, Danwon-gu in Ansan City (0.61%) rose mainly in low-priced complexes in Gojan-dong, Gunpo City (0.55%) increased mainly in station-area complexes such as Sanbon and Geumjeong-dong, Siheung City (0.53%) rose mainly in Baegot New Town, which has development prospects, and Guri City (0.53%) increased mainly in mid-to-low-priced complexes near the planned Byeollae Line, but the rate of increase shrank in most areas.

In Daejeon (0.20%), Dong-gu (0.67%) slightly expanded its rate of increase due to expectations of attracting an innovation city, but other areas saw a reduced rate of increase due to accumulated fatigue from previous rises and weakened buyer sentiment. Daedeok-gu (0.16%) rose mainly in areas with planned tram lines and good accessibility to Sejong City, such as Seokbong, Songchon, and Beopdong, and Seo-gu (0.15%) increased mainly in complexes with development expectations such as redevelopment projects or good living conditions.

Sejong City also rose by 0.24%, down from 0.27% the previous week, showing a slowdown in the rate of increase.

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