Jeju and Daejeon Also Decline... Provincial Areas Follow the Trend of 'Selling Apartments'

Regional Buy-Sell Supply Index Falls Below 100 This Week
Buying Momentum Weakens Nationwide... Is the Balloon Effect Over?
Jeju and Daejeon, Where House Prices Soared This Year, Also See More Sellers Than Buyers>

A real estate agency office in a densely populated apartment complex in Seoul / Photo by Hyunmin Kim kimhyun81@

Following the Seoul metropolitan area, the apartment market in provincial areas has also shifted to a 'seller's market.' This is because, for the first time this year, in places like Jeju Island and Daejeon, where housing prices had sharply risen, the number of people wanting to sell their homes has surpassed those wanting to buy, significantly dampening buyer sentiment. Some analysts suggest that as overall buyer sentiment in the housing market weakens, the provincial balloon effect has also come to an end.

According to the Korea Real Estate Board on the 17th, the apartment sales supply-demand index in provincial areas recorded 98.6 this week, down 1.7 points from 100.3 the previous week. This index quantifies the balance between supply and demand by analyzing surveys from frontline real estate agencies and online listings, on a scale from 0 to 200, where values closer to 0 indicate supply exceeding demand.

This is the first time in about 1 year and 2 months since the third week of October last year (99.3) that the provincial apartment sales supply-demand index has fallen below 100. Provincial areas have shown a steep price increase throughout this year, driven by investment demand from outsiders focusing on relatively affordable apartment complexes compared to the metropolitan area. According to real estate research firm Realtoday, one out of three buyers of provincial apartments from January to October this year was an outside investor.

However, since last month, buyer demand in provincial areas has gradually weakened due to fatigue over high housing prices, government loan regulations, and interest rate hikes. In fact, this week, Daejeon, Jeju Island, and Chungbuk fell below the index of 100 for the first time this year, and other regions are also approaching the baseline.

Jeju Island, which saw the highest apartment price increase rate nationwide this year (19.89%) excluding the metropolitan area due to economic recovery from COVID-19, recorded an index of 98.6 this week, indicating a shift to supply dominance. The weekly apartment price increase rate, which exceeded 1% in May, has dropped to 0.09% this week.

Daejeon also saw its index fall below 100 (99.0) for the first time in 2 years and 5 months since July 2019. According to real estate big data firm Apartment Real Transaction Price (Asil), the number of apartment listings in Daejeon reached 9,061 on this day, an increase of more than 36% compared to early this year (6,661). A real estate agent in Seo-gu, Daejeon, explained, "Transactions are sluggish as sellers and buyers are cautious of each other," adding, "Some urgent sale listings are gradually appearing."

Ham Young-jin, head of the Zigbang Big Data Lab, said, "Price increases have continued this year in regions like Daejeon and Jeju, but the overall upward trend is slowing down," adding, "While the outskirts tended to follow the rise in major areas, the market vitality is declining due to rising interest rates and strengthened loan regulations."

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