Economic Deputy Prime Minister Claims House Prices Fell... Selectively Picking Decline Cases to Suit Preferences

"Results Emerging One Month After the 8·4 Measures"
"Automatic Deregistration of Corporate Businesses and Rental Housing Listings Will Stabilize Prices Once on the Market"
Examples of Price Declines in Major Apartments Like Banpo Xi, Lissantz, and Marefu
Comparisons Made Only with Transactions of Different Scales or Cases Showing Larger Price Drops

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, is delivering opening remarks at the '6th Real Estate Market Inspection Meeting of Related Ministers' held on the 8th at the Government Seoul Office in Jongno-gu, Seoul. Photo by Kang Jin-hyung aymsdream@

[Sejong=Asia Economy Reporter Kim Hyunjung] Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, emphasized on the 8th that the real estate market will stabilize, citing the weakening expectations of house price increases and the release of properties held by corporate and rental housing operators. However, to emphasize this trend and policy effects, controversy is expected as some incorrect or price-distorting sales cases were cited as examples.

On the morning of the 8th, Hong Nam-ki chaired the 6th Real Estate Market Inspection Meeting of related ministers at the Government Seoul Office and said, "One month after the August 4 supply measures, results are appearing." He added that if the announced real estate policies are implemented, market expectations will stabilize, and a significant portion of the approximately 468,000 registered rental housing units scheduled for automatic cancellation within the year will be supplied to the market as listings, solidifying price stability.

In this process, he unusually mentioned specific areas such as Seocho-gu and Songpa-gu in Seoul as "major areas," emphasizing that actual transaction prices have noticeably fallen. In the distributed remarks, specific examples were given including Banpo Xi in Banpo-dong, Seocho-gu (84.94㎡), Rescence in Jamsil-dong, Songpa-gu (27.68㎡), Mapo Raemian Prugio 3rd Complex in Ahyeon-dong, Mapo-gu (59.92㎡), and Bulam Hyundai in Nowon-gu (84.9㎡). Banpo Xi reportedly dropped sharply from 2.85 billion KRW (25th floor) on July 28 to 2.44 billion KRW (18th floor), Rescence from 1.15 billion KRW (5th floor) to 895 million KRW in the same period, Mapo Raemian Prugio 3rd Complex from 1.4 billion KRW (14th floor) to 1.1 billion KRW (7th floor), and Bulam Hyundai from 680 million KRW (19th floor) to 590 million KRW (17th floor), a rapid decline of 90 million to 410 million KRW within about a month.

Minister of Land, Infrastructure and Transport Kim Hyun-mi is attending the '6th Real Estate Market Inspection Meeting of Related Ministers' held at the Government Seoul Office in Jongno-gu, Seoul on the 8th. Photo by Kang Jin-hyung aymsdream@

However, according to the Ministry of Land, Infrastructure and Transport’s actual transaction price disclosure system and the Seoul Real Estate Information Plaza, there were no transactions of 59.92㎡ units in Mapo Raemian Prugio 3rd Complex in July. The government’s cited case was for a 59.98㎡ unit, which differs in size. In the case of Bulam Hyundai, on the same day (5th) as the 590 million KRW transaction, a comparable unit on the same floor (19th floor) was sold for 660 million KRW. In Banpo Xi, a unit of 85㎡ sold for 2.71 billion KRW (8th floor) in early July actually rose to 2.8 billion KRW (17th floor) by mid-August. Rescence also saw a 25th-floor unit of the same size sold for 985 million KRW in early July, and a 29th-floor unit sold for 1.07 billion KRW last month. This suggests that the government selectively picked cases that appeared to have large price drops without considering individual unit values or conditions such as options and floor levels.

It is also pointed out that the government’s emphasis on policy effects and housing price stabilization is contradicted by the steady rise in jeonse (long-term lease) prices. According to the Korea Real Estate Board, the weekly apartment jeonse price in Seoul rose by 0.09% in the fifth week of August (as of the 31st), marking 62 consecutive weeks of increase. Looking at August alone, Seoul apartment jeonse prices rose 0.68% month-on-month, the largest increase in 4 years and 8 months since December 2015 (0.70%).

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