'Barometer of Housing Prices' Gangnam Apartments... Average Sale Price Falls for the First Time in 10 Months

Korea Real Estate Board Nationwide Housing Price Trend Survey
Price Decline Narrow but Reverses After 10 Months
Seoul Sales Supply-Demand Index Also Falls for 7 Consecutive Weeks

[Image source=Yonhap News]

[Asia Economy Reporter Moon Jiwon] Last month, the average apartment sale price in Gangnam-gu, Seoul, fell for the first time in 10 months. Although the decline was not significant, the fact that apartment prices in the Gangnam area?often regarded as a barometer of Seoul's housing market?have dropped has led to speculation that the previously soaring housing market may have reached a turning point. The apartment sale supply-demand index in Seoul has also continued to decline for seven consecutive weeks.

According to the nationwide housing price trend survey by the Korea Real Estate Board on the 2nd, the average apartment sale price in Gangnam-gu, Seoul, last month was 1.76015 billion KRW, down 8.46 million KRW (0.48%) from 1.76861 billion KRW the previous month. During the same period, the median apartment sale price in the area also fell by 12.5 million KRW (1.44%), from 1.7125 billion KRW to 1.7 billion KRW.

This marks the first time in 10 months since May last year that apartment prices in Gangnam-gu have turned downward. The Korea Real Estate Board explained that the announcement of the 2·4 measures and the subsequent disclosure of specific supply schedules weakened buyer sentiment. Additionally, the sharp rise in official property prices increased holding taxes, and with the pre-sale schedule for the 3rd phase new towns approaching, listings accumulated and prices dropped.

Although the price decline last month was minor compared to the previous upward trend, since Gangnam is typically considered a barometer of Seoul's housing prices, there is a possibility that price stabilization will accelerate in other districts as well. For example, in Songpa-gu, the median apartment sale price last month remained steady at 1.2935 billion KRW, indicating a slowdown in the upward trend.

In fact, a 39㎡ apartment in Kkachimaeul, Suseo-dong, Gangnam-gu, saw its actual transaction price drop by 25 million KRW from 1.05 billion KRW on the 3rd of last month to 1.025 billion KRW on the 13th. Similarly, an 84㎡ unit in Lake Palace, Jamsil-dong, Songpa-gu, was traded for 2.185 billion KRW on the 12th of last month, down 13 million KRW from the previous month's highest price of 2.198 billion KRW.

The seller's market for apartments is also gradually weakening. According to the weekly apartment price trend by the Korea Real Estate Board, Seoul's apartment sale supply-demand index this week was 101.0, down 3.1 points from last week's 104.1, approaching the baseline of 100. This index is calculated by analyzing surveys from frontline real estate agencies and the number of online listings; a value below 100 indicates that supply exceeds demand.

Seoul's apartment sale supply-demand index has been declining for seven consecutive weeks since the second week of February. In the Gangbuk area (14 districts north of the Han River), the index dropped to 99.4 this week, falling below 100 for the first time in 21 weeks, signaling weakened buyer sentiment. Within Gangbuk, the Dongbuk area (Seongdong, Gwangjin, Dongdaemun, Jungnang, Seongbuk, Gangbuk, Dobong, Nowon districts) fell to 98.8, below 100 for the first time in 21 weeks, and the Seobuk area (Eunpyeong, Seodaemun, Mapo districts) dropped to 97.8, below 100 for the first time in 16 weeks.

However, some redevelopment complexes are still maintaining high prices due to expectations of regulatory easing, making it difficult to definitively state that housing prices have stabilized. The Korea Real Estate Board noted, "There is an overall decrease in buying activity mainly among those in their 30s and younger," but added, "Price increases continued in older complexes with expectations of progress in redevelopment projects."

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