Seoul and Capital Area Nationwide Housing Price Increase Slows Down: "Decrease in Buying Demand"

Korea Real Estate Board March Nationwide Housing Price Trends
Most Areas Including Seoul and Gyeonggi-do Show Slower Price Increases
Only Incheon Sees Sharp Rise in Both Sale and Jeonse Prices
Decline in Panic Buying Among 30s Suggests Market Stabilization

Seoul Real Estate Agency Office
[Image Source=Yonhap News]

[Asia Economy Reporter Moon Jiwon] Last month, the housing price increase rate in most regions nationwide, including Seoul and Gyeonggi Province, was found to have narrowed compared to the previous month.

This is somewhat different from the atmosphere when the housing price increase rate in the metropolitan area reached its highest point in 12 years and 8 months last February. Although concerns have arisen that the government's supply measures may face setbacks due to speculation allegations involving employees of Korea Land & Housing Corporation (LH) and public officials, the buying momentum appears to have slowed as the perception that the housing price increase was excessive has spread.

According to the nationwide housing price trend survey for March released by the Korea Real Estate Board on the 1st, the comprehensive housing price (including apartments, detached houses, and row houses) nationwide rose by 0.74%, narrowing the increase compared to the previous month (0.89%). By region, Seoul's increase narrowed from 0.51% to 0.38%, the metropolitan area from 1.17% to 0.96%, and other provinces from 0.64% to 0.53%, showing a similar trend.

In Seoul, during this period, the upward trend continued mainly in areas with development prospects such as Nowon-gu (0.68%) and Dobong-gu (0.55%), as well as areas with expectations for progress in redevelopment projects such as Seocho-gu (0.46%) and Gangnam-gu (0.45%), but the rate of increase decreased.

In Yangcheon-gu (0.43%), where expectations for reconstruction were high, the rate of increase expanded, but since some complexes recently received a reconstruction prohibition judgment in the safety diagnosis adequacy review, it is observed that the additional driving force for housing price increases has diminished for the time being.

However, housing prices in the Incheon area rose by 1.31%, increasing the rate of rise for five consecutive months since October last year. Incheon also recorded the highest increase in jeonse prices this year, rising by 0.95%.

The Korea Real Estate Board explained, "Since the announcement of the 2·4 measures, buying demand has decreased in Seoul and Gyeonggi Province due to expanded mid- to long-term market stabilization prospects, increases in U.S. Treasury and market interest rates, holding tax burdens, and a decrease in buyers under 30, resulting in an overall narrowing of the increase rate." This survey reflects the rate of change from February 16 to March 15 and partially reflects the impact of the LH scandal.

The jeonse market is also gradually stabilizing. The nationwide comprehensive jeonse price rose by 0.46%, narrowing the increase compared to the previous month (0.64%). The metropolitan area (0.72% → 0.51%), Seoul (0.42% → 0.29%), and other provinces (0.58% → 0.41%) also saw a decrease in the rate of increase, and Sejong, which surged by 2.95% last February, also saw a significant slowdown in the jeonse price increase rate (0.66%).

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