Gangnam-gu Apartment Prices Fall for the First Time in 18 Weeks... Jeonse Prices Rise for 68 Consecutive Weeks

Sales Hesitation, Jeonse Prices Continue to Surge
Seoul Apartment Sellers and Buyers in Tug-of-War
Jeonse Instability... Incheon and Gyeonggi See Rising Rates

Apgujeong Hyundai Apartment. Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Moon Jiwon] Apartment prices in Gangnam-gu, Seoul have turned to a downward trend after 18 weeks.

According to the weekly apartment price trend for the second week of October released by the Korea Real Estate Board on the 15th, as of the 12th, apartment prices in Seoul rose by 0.01% compared to the previous week. The tug-of-war between sellers and buyers continues, maintaining the same rate of increase for eight consecutive weeks.

The Korea Real Estate Board explained, "While government stabilization measures and concerns over economic contraction caused by the novel coronavirus (COVID-19) continue, prices rose mainly for mid-to-low-priced and small units, but in Gangnam-gu, the buying demand decreased mainly for some reconstruction projects, turning to a downward trend."

In fact, apartment prices in Gangnam-gu fell by 0.01% this week, marking a decline for the first time in 18 weeks since the rise of 0.02% in the second week of June.

Gangnam-gu had been on a downward trend for five months from January, then shifted to an upward trend from June. However, due to successive government real estate measures and the impact of COVID-19, the rate of increase began to shrink, recording an 0.01% increase for eight consecutive weeks before turning to a flat 0.00% last week.

In Gangnam-gu, it appears that asking prices fell mainly in some reconstruction complexes or large-sized units. Among the four Gangnam districts, Seocho-gu and Gangdong-gu (0.00%) also maintained a flat trend, while Songpa-gu (0.01%) rose mainly in small units in Wirye New Town. The atmosphere is becoming cautious due to holding tax burdens from the July 10 and August 4 measures.

Outside the four Gangnam districts, Gwanak-gu (0.02%) rose mainly in mid-to-low-priced complexes in Bongcheon-dong, Gangseo-gu (0.01%) in Yeomchang and Banghwa-dong, and Yeongdeungpo-gu (0.01%) mainly in older complexes in Dangsan-dong.

North of the Han River, Nowon-gu (0.02%) slightly increased mainly in reconstruction projects in Wolgye-dong, Jung-gu (0.02%) in station-area complexes, and Jungnang-gu (0.01%) centered on Sangbong and Sinnye-dong. However, Mapo-gu (0.00%) shifted from an increase last week to flat this week.

In Incheon, the apartment price increase rate expanded from 0.05% last week to 0.08% this week. Prices rose mainly in Bupyeong-gu (0.15%), which benefits from transportation improvements such as the extension of Line 7, and Michuhol-gu (0.11%), which has favorable living conditions.

In Gyeonggi-do, the increase rate also rose from 0.09% to 0.10%. Significant increases were seen in Giheung and Suji-gu in Yongin (0.22%, 0.19%), Deogyang-gu in Goyang (0.20%), Dong-gu in Ilsan (0.17%), Uijeongbu-si (0.17%), and Jungwon-gu in Seongnam (0.16%).

Unlike the sales market where price increases have slowed, the jeonse (long-term lease) market is still showing unstable signs with prices rising sharply.

Seoul apartment jeonse prices rose by 0.08%, the same as the previous week, while the metropolitan area (0.14%→0.16%), provinces (0.15%→0.16%), five major metropolitan cities (0.16%→0.18%), and eight provinces (0.09%→0.11%) all saw an expansion in the rate of increase.

In Seoul, the shortage of listings continues due to a decrease in new housing supply, increased demand waiting for subscription, and strengthened residency requirements. Especially with the influx of autumn moving demand, jeonse prices are rising steeply. This marks the 68th consecutive week of increase.

The government's measures to stabilize jeonse prices are insufficient, and the number of new housing units in Seoul and Gyeonggi is continuously decreasing from about 150,000 units last year to about 126,000 units this year and about 93,000 units next year, so this trend is expected to continue for the time being.

In the four Gangnam districts, the shortage of listings continues overall. Jeonse price increase rates expanded compared to the previous week in Songpa-gu (0.11%), Gangnam-gu (0.10%), and Seocho-gu (0.08%), while Gangdong-gu (0.08%) slightly decreased but the upward trend continues mainly in Myeongil and Godeok-dong, which have good educational environments.

Jeonse prices in Incheon and Gyeonggi-do are also rising significantly.

In Incheon, the increase rate expanded from 0.13% last week to 0.23% this week. Jung-gu (0.39%) rose mainly in new complexes in Yeongjong New Town, Yeonsu-gu (0.35%) in Songdo-dong, Bupyeong-gu (0.27%) in Bugae and Samsan-dong, and Seo-gu (0.26%) mainly in Cheongna-dong.

In Gyeonggi-do, apartment jeonse prices rose by 0.19%, an increase from 0.17% the previous week. Significant rises were seen in Hwaseong-si (0.32%), Uijeongbu-si (0.32%), Sujeong-gu in Seongnam (0.27%), and Jangan-gu in Suwon (0.27%), while Paju (-0.11%) and Yeoju (-0.04%) continued to decline due to the impact of new housing supply.

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