Is This a Signal of Seoul Apartment Price Decline... Listings Increase and Prices Stall

Seoul Apartment Listings Increase by 2.4% Compared to Last Week
Some Apartment Complexes Sold Several Hundred Million Won Below Market Price
Regulations and COVID-19 Impact Keep Prices Steady
However, Possibly a Temporary Effect... Tug of War Continues

(Photo by Yonhap News)

[Asia Economy Reporter Moon Jiwon] The number of apartment listings in Seoul, which had been declining, showed a slight increase compared to last week. Apartments are increasingly being traded at prices several hundred million won below market value in various parts of Seoul. This has led to analyses suggesting that the effects of the government's successive real estate measures are beginning to show.

According to 'Asil' (Apartment Real Transaction Price), a real estate big data company, as of the 6th, the number of apartment sale listings in Seoul was 42,879, a 2.4% increase from 41,852 listings last week. Asil counts listings registered online, excluding duplicates.

In Seoul, Dobong-gu showed the highest increase in listings at 8.5% compared to the previous week, followed by Guro-gu and Yangcheon-gu (6.5%), Songpa-gu (6.0%), Nowon-gu (5.4%), Geumcheon-gu (5.3%), Jongno-gu (4.7%), and Gwanak-gu (4.6%), among 21 districts where listings increased. Only Seongdong-gu (-2.7%), Gwangjin-gu (-1.3%), Gangdong-gu (-1.0%), and Gangnam-gu (-0.1%) maintained a decrease in listings.

The increase in listings is interpreted as a result of the government significantly raising tax burdens on multi-homeowners and corporations through measures such as the July 10th policy, combined with the economic freeze caused by the recent resurgence of COVID-19.

In fact, in some apartment complexes in Seoul, properties are being traded at prices significantly lower than market value. For example, an 84.94㎡ unit in Banpo Xi, Banpo-dong, Seocho-gu, Seoul, was traded on the 18th of last month for 2.44 billion won (18th floor), which is 260 million won lower than the 2.7 billion won transaction on July 30th (23rd floor). Prices for this size unit have been continuously declining since a transaction at 2.85 billion won on July 8th.

Similarly, a 192.23㎡ unit in Olympic Family Town, Munjeong-dong, Songpa-gu, Seoul, saw its transaction price drop nearly 500 million won from 2.54 billion won (10th floor) on July 17th to 2.05 billion won (14th floor) on August 26th. Industry insiders believe these are likely urgent listings by corporations or transactions between related parties.

Earlier, on the 2nd, Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki held the 5th Real Estate Market Inspection Meeting at the Government Seoul Office and stated, "About a month after preparing a comprehensive policy package including the August 4th supply measures, market stabilization effects are appearing." Minister of Land, Infrastructure and Transport Kim Hyun-mi also said that the market would begin to stabilize from August.

However, many forecasts suggest that the effects of the real estate measures may be temporary. Since the Moon Jae-in administration announced real estate policies, housing prices have temporarily stalled but then risen again repeatedly. Although the economy is not strong due to COVID-19, the effects of the measures may be offset by low interest rates and abundant liquidity. Except for certain abnormal transactions, high asking prices are maintained in many apartment complexes.

The Korea Real Estate Board explained, "Due to concerns about the real economy caused by the resurgence of COVID-19, buying demand is shrinking mainly for high-priced and major reconstruction complexes, leading to a wait-and-see stance." An industry official said, "Listings are expected to gradually increase ahead of next year's property tax assessment date," adding, "While a tug-of-war between sellers and buyers will continue for the time being, a sharp drop is unlikely."

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