Seoul and Capital Area Apartment Price Increase Narrows Again... "Mid- to Long-Term Market Stability Expected"

Korea Real Estate Board March 3rd Week Apartment Price Trends
National Apartment Price Increase Rate 0.23%→0.24%
Seoul Also Shows Reduced Growth... Impact of 2·4 Measures
Quiet Jeonse Market... Accumulation of Listings in Gangnam Area

[Image source=Yonhap News]

[Asia Economy Reporter Moon Jiwon] The nationwide apartment price increase rate, including Seoul and the metropolitan area, has further narrowed compared to the previous week. This is interpreted as a sign that buying sentiment has somewhat stabilized amid growing expectations that the supply volume could increase in the mid to long term following the government's 2.4 supply plan announced last month.

However, since the upward trend in apartment prices continues and there remains a possibility that follow-up measures to the 2.4 plan could face setbacks due to allegations of land speculation by employees of the Korea Land and Housing Corporation (LH) in new towns, analysts say it is difficult to conclude that the housing price stabilization trend has fully taken hold.

According to the weekly apartment price trend for the third week of March released by the Korea Real Estate Board on the 18th, as of the 15th, nationwide apartment prices rose by 0.23%, narrowing the increase compared to the previous week (0.24%). The nationwide apartment price increase rate has been on a continuous downward trend since recording 0.29% in the fourth week of January.

In Seoul, apartment prices rose by 0.06% this week, also narrowing the increase compared to the previous week (0.07%). The Korea Real Estate Board explained, "Buying sentiment is stabilizing due to expectations of increased supply and mid-to-long-term market stabilization following the 2.4 plan," adding, "With market interest rates rising, transaction volumes have decreased and the rate of price increases has continuously narrowed."

In Seoul, the Gangnam area recorded relatively high price increases. Seocho-gu (0.09%) saw price rises mainly in large established complexes in Seocho and Bangbae-dong, Gangnam-gu (0.08%) saw increases centered on major reconstruction projects in Apgujeong and Gaepo-dong, and Songpa-gu (0.08%) maintained the same increase as the previous week with strong buying demand focused on Jamsil and Sincheon-dong.

Yangcheon-gu (0.11%), where expectations for Mokdong reconstruction are high, also showed a high increase rate, and Nowon-gu (0.10%) saw an expanded increase mainly in established complexes in Wolgye-dong with reconstruction expectations.

Gyeonggi Province still shows a strong upward trend, but the increase rate slightly slowed from 0.38% to 0.37%. Uiwang-si (0.90%) saw significant rises mainly in Ojeon and Gocheon-dong, influenced by redevelopment projects, and Ansan-si (0.85%), Siheung-si (0.81%), and Gunpo-si (0.50%) also experienced strong buying demand in areas with transportation benefits.

Incheon, which had a large price increase until last month, has seen the increase rate decline this month from 0.41% to 0.39% and then to 0.36%. Yeonsu-gu (0.49%) saw price rises mainly in Songdo New Town with good residential environments and Okryeon-dong with redevelopment expectations, while Seo-gu (0.43%) saw increases centered on Gajeong and Dangha-dong with favorable transportation conditions.

Sejong also saw its apartment price increase rate narrow from 0.18% to 0.16%. The Korea Real Estate Board explained, "Buying demand has weakened due to short-term surge fatigue, showing signs of stabilization, while prices rose mainly in small to medium-sized apartments in Jochiwon-eup on the outskirts of the city."

Apartment complexes in downtown Seoul as seen from 63 Square, Yeongdeungpo-gu, Seoul (Photo by Yonhap News)

Nationwide apartment jeonse (long-term lease) prices also rose by 0.15% this week, narrowing the increase compared to the previous week (0.16%). Since the new lease law was implemented in July last year, the increase rate has maintained a high level of 0.2~0.3% weekly, but this year the rate of increase is gradually slowing.

Seoul apartment jeonse price increase rate slowed from 0.06% to 0.05%. The Korea Real Estate Board explained, "While the jeonse price increase continued mainly in some relatively low-priced areas in northern Seoul and older complexes, the increase rate narrowed compared to last week as listings increased mainly in high-priced complexes."

In fact, the Gangnam 4 districts such as Songpa and Seocho-gu (0.02%) and Gangnam and Gangdong-gu (0.01%) showed low jeonse price increases of 0.01~0.02% due to accumulated jeonse listings.

On the other hand, mid- to low-priced complexes in Gwanak-gu (0.06%) and Dongjak-gu (0.05%) recorded relatively high increases. Seongdong-gu (0.09%), Seongbuk-gu (0.09%), Nowon-gu (0.09%), and Jungnang-gu (0.08%) also showed significant increases.

In Gyeonggi Province (0.18%→0.17%), Siheung-si (0.56%) saw jeonse prices rise mainly in areas with good access to Seoul, and Pyeongtaek-si (0.56%), Dongducheon-si (0.41%), and Uiwang-si (0.27%) also experienced significant jeonse price increases.

Incheon’s jeonse price increase rate expanded from 0.25% to 0.26%. Namdong-gu (0.43%), Bupyeong-gu (0.38%), Jung-gu (0.35%), and Seo-gu (0.29%) all showed high increase rates.

Sejong’s jeonse price increase rate halved from 0.24% last week to 0.12% this week. The Korea Real Estate Board analyzed, "Jeonse prices rose mainly in low- to mid-priced areas such as Naseong and Hansol-dong in the Happy City and Jochiwon-eup, but the increase rate narrowed due to factors such as new occupancy in Naseong-dong."

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