COVID-19 March Apartment Sales Plummet... Gangnam 3 Districts Sales Prices Rise

Zigbang Investigates Monthly Apartment Sales Volume and Average Prices in Major Areas of Seoul and Gyeonggi
Gangnam 3 Districts See Decrease in Sales Volume but Slight Rise in Prices

Monthly Apartment Sales Volume and Average Sales Price Trends in the Past Year for the Three Gangnam Districts of Seoul

[Asia Economy Reporter Onyu Lim] Apartment sales transactions in major areas of Seoul and Gyeonggi Province sharply declined last month due to the February 20 real estate measures and the impact of the novel coronavirus disease (COVID-19). As the apartment market is being reorganized around actual demand, this trend is expected to continue for the time being. However, the movement of average sales prices varied by region.

According to Zigbang on the 13th, the monthly apartment sales volume in the Gangnam 3 districts of Seoul (Gangnam-gu, Seocho-gu, Songpa-gu) last month was 287 transactions, marking the lowest point in the past year. The volume decreased to 469 transactions in January due to the impact of the December 16 real estate measures last year, then slightly increased to 754 transactions in February, but fell again last month due to COVID-19. By apartment size, the decrease was mainly centered on medium to large units exceeding 85㎡ (exclusive area). However, the average sales price showed a solid trend, slightly rebounding to 1,520.58 million KRW from 1,402.68 million KRW in January.

Monthly Apartment Sales Volume and Average Sales Price Trends in Mapo-gu, Yongsan-gu, and Seongdong-gu, Seoul Over the Past Year

Mayongseong (Mapo-gu, Yongsan-gu, Seongdong-gu) showed a similar trend to the Gangnam 3 districts. Last month’s transaction volume was 247, a sharp decrease compared to 559 in February. The average sales price was 1,070.56 million KRW, lower than 1,132.91 million KRW in December last year but showing a recovery from 1,051.10 million KRW in January.

Monthly Apartment Sales Volume and Average Sales Price Trends in Nowon-gu, Dobong-gu, and Gangbuk-gu, Seoul Over the Past Year

Nodogang (Nowon-gu, Dobong-gu, Gangbuk-gu) showed a different movement from the Gangnam 3 districts and Mayongseong. After maintaining a high transaction volume of 1,978 in February, it decreased to 895 last month due to COVID-19 and weakened consumer sentiment. The average sales price has steadily maintained at 476.30 million KRW.

Monthly Apartment Sales Volume and Average Sales Price Trends in Suwon, Yongin, and Seongnam, Gyeonggi Province Over the Past Year

The sales volume in Suyongseong (Suwon, Yongin, Seongnam) continued to increase this year, reaching the highest number of transactions (8,655) in February. This was analyzed as a balloon effect caused by increased interest in mid- to low-priced apartments in Gyeonggi Province due to the December 16 measures. However, with the government expanding regulated areas through the February 20 measures and the ongoing impact of COVID-19, Suyongseong experienced the largest decrease in transaction volume last month compared to Gangnam 3 districts, Mayongseong, and Nodogang. The March transaction volume was only 2,004. The average sales price also fell from 516.19 million KRW in February to 461.71 million KRW.

Ham Young-jin, head of Zigbang Big Data Lab, said, "Due to the February real estate measures and the impact of COVID-19, transaction volumes sharply declined from March across the board," adding, "Consumer sentiment has weakened due to COVID-19, leading to a wait-and-see attitude in purchases."

He also predicted that the balloon effect in the metropolitan area would calm down. Ham said, "Aggressive investment-driven home purchases will decrease for a while, and as transactions are limited to mid- to low-priced homes for actual demand, the balloon effect in the metropolitan area, where people moved to non-regulated areas and sought favorable conditions, will gradually subside."

However, he analyzed that low interest burdens are keeping mortgage loan delinquency rates stable, so the transaction slowdown has not yet led to a full-scale price adjustment. Ham advised, "There is a possibility that the price trend will decline first in areas with significant short-term investment demand outflows," adding, "Since uncertainty in the domestic economy has increased significantly after the COVID-19 pandemic, a conservative approach is necessary for home purchases, which involve substantial asset investment."

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