Is It a Major Downtrend or a Short-Term Correction? ... Seoul Apartment Listings Up, Prices Down

Real Transaction Prices Drop Across Seoul Apartments
Some Complexes Fall Over 100 Million Won
Contrasting Early Year Mood...Increase in Seoul Listings
Multiple Variables Including Dabban Speculation Probe, Property Tax
Experts Say "Too Early to Declare a Downtrend"

[Asia Economy Reporter Moon Jiwon] The real estate market is showing increasing signs of mixed trends. As apartment listings accumulate mainly in Seoul, cases of actual transaction prices dropping by more than 100 million KRW in some complexes are emerging one after another, but overall, the atmosphere of rising housing prices seems to continue. Industry experts largely agree that considering the many variables in the market situation?such as the investigation into public officials' speculation triggered by Korea Land and Housing Corporation (LH), volumes avoiding property holding taxes, and follow-up measures to the 2·4 housing plan?it is still too early to talk about a general downward trend.

◆ Accumulating Listings, Market Adjustment? = According to Apartment Real Transaction Price (Asil), a real estate big data company, as of the 22nd, all 25 autonomous districts in Seoul showed an increase in apartment listings compared to a month ago. Dobong-gu recorded a 24% increase, with listings rising from 1,050 to 1,302 during this period. Other districts such as Nowon, Jongno, and Seodaemun increased by 21.0%, and Gwanak-gu by 20.5%, showing a significant rise in listings within a month. Geumcheon-gu had the lowest increase rate at 3.8% in Seoul.

This atmosphere is quite different from earlier this year. In January alone, apartment listings decreased by about 25% in all 25 districts, including Dongjak-gu (-26.0%) and Nowon-gu (-24.6%). This was because the government designated major local cities such as Busan and Ulsan as regulated areas at the end of last year, concentrating buying demand in key areas of Seoul and Gyeonggi Province. As a result, nearly half of the apartments traded early this year reached record-high prices, indicating an overheated market.

However, nearly 50 days after the announcement of the 2·4 housing plan, the market atmosphere has changed to the extent that cases of actual transaction price declines can be easily found in major apartment complexes in Seoul. For example, an 84㎡ (exclusive area) unit in Yongsan KCC Welts Tower, Munbae-dong, Yongsan-gu, was traded for 1.285 billion KRW on the 19th of last month but was contracted for 1.06 billion KRW on the 8th of this month, dropping by 225 million KRW.

The actual transaction price of a 114㎡ unit in SK Bukhan Mountain City, Suyu-dong, Gangbuk-gu, also fell by 52 million KRW from 930 million KRW on the 18th of last month to 878 million KRW on the 1st of this month. A representative from A Real Estate Agency in Mia-dong, Gangbuk-gu, explained, "Although the asking prices have not dropped significantly, buying demand has decreased considerably."

◆ Experts: "It Is Still Too Early for a General Downturn" = However, there are many variables that could affect the real estate market going forward, so it is not easy to assert that housing prices will stabilize. In particular, if the government's real estate supply measures lose momentum due to speculation by LH employees, buying demand may revive. The fact that apartment listings in Seoul are not explosively increasing despite the government's 'property holding tax bomb' also supports the possibility of buying demand recovering after the comprehensive real estate tax imposition date in June.

In fact, despite the increase in listings, many apartments are still seeing price increases. For example, an 84㎡ unit in Daerim e-Pyeonhansesang, Daerim-dong, Seongdong-gu, rose by more than 100 million KRW from 1.16 billion KRW on the 23rd of last month to 1.275 billion KRW on the 6th of this month. Similarly, a 59㎡ unit in Hyundai, Daebang-dong, Dongjak-gu, increased by 32 million KRW from 838 million KRW on December 12 last year to 870 million KRW on the 6th of this month, setting a new record price.

Experts also explain that it is difficult to say that housing prices have fully entered a downward phase. Ahn Myung-sook, head of the Real Estate Investment Support Center at Woori Bank, said, "While it is true that buying demand is weakening as we closely monitor how many avoidance listings will come out due to increased property holding taxes, I think it is still a bit early to say that the decline is the general trend."

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