Seoul Apartment Prices Stop Falling... Is the COVID-19 Induced 'Sale' Over?

Seoul Apartment Prices Stabilize After 10 Weeks
Gangnam Decline Narrows, Mid-Low Priced Complexes in Gangbuk Rise
Jeonse Prices Continue Upward Trend... Seoul 0.04% Increase

[Image source=Yonhap News]

[Asia Economy Reporter Moon Jiwon] Seoul apartment prices have turned to a flat trend after 10 weeks. Analysts suggest that housing prices, which had frozen due to the economic recession caused by the novel coronavirus infection (COVID-19) and government regulations, are rising again along with economic recovery.

According to the 'Weekly Apartment Price Trend for the First Week of June' by the Korea Real Estate Board on the 5th, Seoul apartment prices stopped declining and shifted to a flat trend as of June 1. Seoul apartment prices began to fall on March 30 and maintained a downward trend until the end of last month.

The Korea Real Estate Board explained, "With the base interest rate cut and the passing of the holding tax reference date (June 1), urgent sale properties have been exhausted, mainly in complexes exceeding 1.5 billion KRW, leading to a stabilization of the decline," adding, "Mid-to-low-priced complexes under 900 million KRW showed an upward trend, turning flat after nine weeks since the decline in the fifth week of March."

The continuous reduction in the decline of high-priced complexes in the Gangnam area, which had driven the downward trend, appears to have influenced the fluctuation in Seoul housing prices. All four Gangnam districts?Seocho (-0.04%), Gangdong (-0.04%), Gangnam (-0.03%), and Songpa (-0.03%)?showed a slowdown in the rate of decline compared to the previous week.

Urgent sale properties were absorbed mainly in some complexes with development prospects, and asking prices rose, reducing the rate of decline. Outside the Gangnam 4 districts, Gangseo (-0.03%) and Yangcheon (-0.01%) declined mainly in reconstruction complexes, but Guro (0.07%) and Geumcheon (0.03%) rose mainly in mid-to-low-priced complexes.

Apartment prices in Gangbuk-gu, where mid-to-low-priced complexes are concentrated, also showed an upward trend. Mapo (-0.03%) and Yongsan (-0.02%) rose mainly in complexes over 900 million KRW, while Dongdaemun (0.03%) and Nowon-gu (0.01%) increased mainly in mid-to-low-priced complexes. Accordingly, the 14 districts north of the Han River shifted to a flat trend this week.

Apartment transaction volumes are also gradually increasing. According to the Seoul Real Estate Information Plaza, the reported apartment transaction volume in Seoul for May (based on contract conclusion) is 3,259 cases, up from 3,019 cases in April. Since the reporting deadline for May transactions has not yet passed, the volume is likely to increase further.

According to a survey by the private research institute Real Estate 114, Seoul apartment prices turned to an upward trend as of May 31, rising by 0.01%. The increase was centered on mid-to-low-priced apartment complexes under 600 million KRW in Nowon, Dobong, Gangbuk (No, Do, Gang), and Geumcheon, Gwanak, Guro (Geum, Gwan, Gu) districts.

Meanwhile, jeonse (long-term lease) prices also maintained an upward trend. According to the Korea Real Estate Board, Seoul apartment jeonse prices rose by 0.04% compared to 0.02% the previous week, expanding the rate of increase.

The Korea Real Estate Board analyzed, "Due to market stabilization in sales, the base interest rate cut, and a shortage of jeonse supply, demand increased mainly in areas with good subway access or school districts, expanding the rate of increase compared to the previous week."

In Mapo-gu (0.07%), prices rose mainly in Yeomni and Changjeon-dong, which have high school district demand; in Yongsan-gu (0.07%), mainly in Ichon and Dowon-dong; and in Gangbuk-gu (0.07%), mainly in large complexes in Mia-dong. Nowon-gu (0.03%) also turned to an upward trend as demand increased for apartment complexes near schools.

In the Gangnam 4 districts, the shortage of jeonse listings persisted overall. In Songpa-gu (0.11%), jeonse prices rose mainly in popular large complexes such as Jamsil, Garak, and Sincheon-dong. Seocho-gu (0.04%) rose mainly in Jamwon and Seocho-dong, and Gangnam-gu (0.04%) increased mainly in subway-accessible areas such as Daechi and Suseo-dong.

Outside the Gangnam 4 districts, Guro-gu (0.05%) saw jeonse prices rise along with sales prices, and Dongjak-gu (0.03%) and Yangcheon-gu also shifted from a decline last week to a flat trend.

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