[Urgent Housing Market Check] Accumulating Listings and Declining Visits... Regional Areas Face Unsold Housing Fear

National Apartment Price Increase Rate Falls Below 0.1% for First Time in 14 Months
Seoul Metropolitan Area Shrinks for 10 Consecutive Weeks...Urgent Sales Appear and Buying Momentum Weakens
Investment Heat Cools as Local Unsold Units Surge...Pohang Follows Daegu with Subscription Shortfall
"Entering a Phase of Slowing Growth" Possibility of Stabilization Next Year

"The atmosphere is basically to wait and see. Only urgent sales with significantly lowered asking prices are barely selling, and transactions have stopped." (Representative of A Real Estate Agency in Nowon-gu, Seoul)

As the housing market cools rapidly from Seoul and the metropolitan area to major provincial cities, concerns about a housing price decline are spreading. Due to the government's comprehensive pressure including loan regulations, interest rate hikes, and increased holding taxes such as comprehensive real estate tax, buying demand has weakened, and the continuous price rise during the current administration has effectively ended. Although listings are piling up at frontline real estate offices, buyers have completely stopped coming, resulting in a disappearance of transactions.

The nationwide apartment price increase rate has fallen below 0.10% for the first time in 1 year and 2 months. In particular, the apartment price increase rate in the metropolitan area including Seoul, Gyeonggi, and Incheon has shrunk for 10 consecutive weeks. In Seoul's Gwanak-gu and Hanam-si in Gyeonggi Province, the housing price rise has stopped, and in Dongducheon and Hwaseong cities, prices have started to decline.

◇ Seoul 5 weeks · Metropolitan area 3 weeks consecutive ‘Sellers > Buyers’ = The metropolitan area including Seoul has long shifted to a seller's market. Even when prices are lowered, foot traffic to view houses has completely stopped, and real estate agents unanimously describe the market as effectively 'closed.' A representative of A Real Estate Agency in Nowon-gu hinted, "Although not yet reported, a 58㎡ unit in Sangye Jugong Complex 6 recently barely sold in the low 700 million KRW range." According to the Ministry of Land, Infrastructure and Transport's actual transaction price disclosure system, this complex was traded at 940 million KRW in September this year.

The situation is similar in Gyeonggi Province. A representative of B Real Estate Agency in Dongtan, Hwaseong said, "Urgent sales with prices lowered by about 50 million KRW to receive capital gains tax exemption are appearing," adding, "Only urgent sales are barely being sold, and given the overall market atmosphere, the transaction slump seems inevitable."

According to the weekly apartment price trend by the Korea Real Estate Board, this week in Seoul, the price increase narrowed in 22 out of 25 autonomous districts except for Yongsan, Gangnam, and Seocho districts. In Gyeonggi Province, the increase narrowed in 38 out of 45 cities and counties. Particularly, with urgent sales appearing and buying demand weakening, Dongducheon (-0.03%) and Hwaseong (-0.02%) shifted to price declines. For example, a 75㎡ unit in Songnae Jugong Complex 1 in Dongducheon was sold on the 30th of last month for 260 million KRW, about 13% lower than the previous transaction price of 300 million KRW. In Hwaseong, a 96㎡ unit in Dongtan Station Central Yemi-ji, which was traded for 1.17 billion KRW in October, was sold on the 8th of this month for 1 billion KRW, a 14% decrease.

◇ After Daegu, Pohang also... The ‘Unsold Housing Nightmare’ Rising in Provinces = Signs of a declining market are also detected in various provincial areas. Until recently, provinces showed a vertical rise in apartment prices due to short-term investments by outsiders in low-priced apartments under 100 million KRW with eased regulations such as acquisition tax. However, recently, with weakened buying demand, the investment enthusiasm in provinces has cooled rapidly, and unsold housing is increasing.

In Pohang, North Gyeongsang Province, where subscription enthusiasm was high this year, undersubscription occurred in four complexes in two districts in the North District and one district in the South District during last month and this month. For example, in the Pohang Taewang Honors, which closed subscription on the 15th, only 155 out of 334 general sale units were subscribed, leaving 179 units unsold. For special sales, only 9 out of 168 units were subscribed. Also, in the Pohang Hanshin The Hue Pentacity A2 block, which closed subscription on the 10th, 840 out of 1,567 general sale units were unsold. A representative of D Real Estate in Pohang said, "Local residents are already sighing, recalling past unsold housing crises."

In Daegu, three complexes?Harrington Place Gamsam 3rd phase, Duryu Jungheung S-Class Centum Foret, and Dongdaegu Prugio Briscent?were all undersubscribed in the first priority local subscription on the 14th. Daegu's housing prices turned to decline in November for the first time in 1 year and 6 months, and the number of unsold apartments reached 1,933 units as of the end of October, the most severe nationwide. Accordingly, Daegu, as well as Ulsan and Dongducheon city in Gyeonggi Province, have requested to be removed from the adjustment target areas.

◇ End of the Rising Market? Spread of the Downtrend Theory = There are concerns in the market that the downtrend theory, advocated by some, may be taking hold as nationwide signs of change in the housing market become clear.

Ye Kyung-hee, senior researcher at Real Estate R114, said, "It is true that the upward trend has slowed," explaining, "The buying sentiment of real demand buyers who purchase houses with loans has been weakened due to strengthened loan regulations and interest rate hikes." She added, "If the increase rate continues to shrink like this, there is a possibility of a flat market next year."

Professor Baek Seong-jun of Hansung University’s Department of Real Estate said, "As interest rate hikes are expected to continue, buying demand seems to have decreased," diagnosing, "The slowdown in the increase rate is expected to continue, and the speed will be determined by factors such as interest rate hikes, inflation, and external variables."

On the other hand, cautious opinions that this is a temporary phenomenon are not insignificant. Ko Jun-seok, adjunct professor at Dongguk University Law School, said, "The current real estate market contraction is a temporary phenomenon due to strengthened regulations," adding, "Only the effects of some demand suppression are becoming visible, and structurally nothing has changed, so it is difficult to see this as a downtrend."

Seo Jin-hyung, president of the Korea Real Estate Society and professor at Gyeongin Women's University, pointed out, "The widening gap between selling and buying demand is due to fatigue from the rapid price rise so far," adding, "Overall statistics show a stabilization trend, but statistical distortions are also occurring due to the transaction cliff."

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