Seoul Comprehensive Housing Sale Prices Fall for the First Time in 10 Months... Real Estate Market 'Frozen'

Gyeonggi-do, Incheon, and Other Seoul Metropolitan Areas and Metropolitan Cities Stall
Holding Tax Demand 'Frozen' Due to COVID-19 Impact

[Image source=Yonhap News]

[Asia Economy Reporter Moon Jiwon] The average monthly comprehensive housing sale price in Seoul turned to a decline for the first time in 10 months since June last year. The rate of increase in housing prices in the metropolitan area, including Gyeonggi-do and Incheon, as well as the five major metropolitan cities, also narrowed compared to the previous month. The real estate market downturn caused by the novel coronavirus infection (COVID-19) is spreading.

According to the 'April Nationwide Housing Price Trend Survey Results' released by the Korea Real Estate Board on the 1st, Seoul's housing prices this month fell by 0.02% compared to the previous month (0.13%). This is the first time since June last year that Seoul's housing prices have dropped in statistics surveyed and announced on a monthly basis.

In Seoul, apartment sale prices clearly declined by 0.10% compared to the previous month (0.10%). Although prices of row houses and detached houses rose by 0.01% and 0.24% respectively, their rate of increase narrowed.

Looking at each autonomous district, housing prices in the Gangnam area led Seoul's downward trend. Gangnam (-0.64%), Seocho (-0.63%), and Songpa-gu (-0.36%) saw an expanded decline, and Gangdong-gu (-0.01%) turned to a decline for the first time in nine months. Guro (0.23%), Gwanak (0.18%), and Geumcheon-gu (0.17%) saw price increases mainly in areas near subway stations and mid-to-low priced complexes, but most showed a reduced rate of increase.

The average monthly housing sale price in the 11 districts south of the Han River shifted to a decline for the first time in 10 months since June last year. The Korea Real Estate Board analyzed, "This appears to be due to loan regulations, the burden of holding taxes caused by rising official property prices, and the impact of COVID-19."

North of the Han River, asking prices fell mainly in popular areas such as Mapo (0.01%), Yongsan (0.03%), and Seongdong-gu (0.02%). In areas like Nowon (0.29%), Dobong (0.15%), and Gangbuk-gu (0.16%), which had previously seen high increases due to development prospects, the rate of increase narrowed as purchase inquiries decreased. All 14 districts in Gangbuk showed either a reduced rate of price increase or a shift to a stable trend.

As Seoul's real estate market, which leads nationwide housing prices, stagnates, the rate of price increase in local areas also slowed. The metropolitan area rose 0.51% compared to 0.93% the previous month. Amid subdued buying sentiment due to COVID-19 and holding tax burdens, Gyeonggi and Incheon saw increases mainly in subway station areas convenient for commuting to Seoul and areas with development prospects, but the extent narrowed.

Due to the downturn in Busan (-0.05%) and Daegu (-0.12%), which shifted to a decline this month, housing prices in the five major metropolitan cities rose only 0.10% compared to 0.26% the previous month. Sejong, which surged 4.24% last month, also saw its growth rate slow to 1.50% this month. Nationwide housing sale prices rose 0.27% compared to 0.54% the previous month.

[Image source=Yonhap News]

Seoul's comprehensive housing jeonse (long-term lease) prices also rose by 0.07% compared to 0.12% the previous month, showing a reduced rate of increase.

Gangnam-gu (0.26%) saw jeonse prices rise mainly in complexes with steady school district demand such as Daechi and Suseo-dong, and Gangdong-gu (0.11%) rose mainly in Gangil and Myeongil-dong. Seocho-gu (0.17%) increased mainly in Jamwon and Seocho-dong, influenced by relocation demand from redevelopment projects, while Dongjak (0.08%) and Yeongdeungpo-gu (0.04%) rose mainly in subway station areas, but overall the rate of increase narrowed.

Yangcheon-gu (-0.10%) continued to see a decline in jeonse prices due to new supply such as Sinjeong New Town I-Park Weave, which has about 3,000 households.

In the Gangbuk area, Seongdong-gu (0.15%) saw jeonse prices rise mainly in large complexes in Geumho and Hawangsimni-dong, and Mapo-gu (0.15%) rose mainly in older complexes in Dohwa and Changjeon-dong. Seongbuk-gu (0.12%) increased mainly in Jeongneung and Gireum-dong but with a narrowed extent. Nowon-gu (-0.09%) saw jeonse prices fall in areas like Sanggye and Hagye-dong due to new supply.

Gyeonggi-do (0.15%) saw jeonse prices rise due to persistent demand for proximity to workplaces and relocation demand from redevelopment projects, but the rate of increase narrowed due to the spread of COVID-19 and other factors. Incheon (0.64%) rose mainly in areas with good transportation and residential conditions.

Sejong (1.14%) rose mainly in areas with good access to transportation and convenience facilities, and Ulsan (0.36%) increased due to a shortage of jeonse supply and increased demand from worker inflow. However, Jeju (-0.21%), Busan (-0.07%), and Gyeongbuk (-0.04%) declined due to the spread of COVID-19, real estate market downturn, and weakened buying sentiment.

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