After Songdo and Cheongna, Dongtan Also Declines... Frequent Drops in Transactions Across the Seoul Metropolitan Area

Incheon Apartment Sale Price Increase Rate Slows for 10 Consecutive Weeks
Last Month, 4 out of 10 Transactions Below Highest Price 'Declining Trades'
Accumulated Fatigue from Rapid Price Surge and Impact of Loan Regulations

Seoul apartment complex view (Photo by Yonhap News)

[Asia Economy Reporter Ryu Tae-min] Recently, as the upward trend in housing prices has slowed, some areas in the metropolitan area are experiencing declines in apartment prices. This appears to be due to the government's tightening of loan regulations combined with accumulated fatigue from the rapid rise in housing prices, causing buying momentum to wane. In particular, with falling transactions occurring not only in Incheon’s Songdo and Cheongna International City, which have consistently shown rapid price increases, but also in Dongtan, there is analysis suggesting that the decline in apartment prices in the metropolitan area could spread further.

According to the weekly apartment price trend for the second week of this month (as of the 13th) announced by the Korea Real Estate Board on the 18th, the apartment price increase rate in the metropolitan area this week was recorded at 0.10%. This is a 0.04 percentage point decrease from last week’s 0.14%.

The weekly increase rate in Incheon also shows signs of slowing. The apartment price increase rate in Incheon for the second week of this month (as of the 13th) was 0.13%, down from 0.17% the previous week. Compared to the increase rate of 0.33% in the second week of November (as of the 8th), about a month ago, this represents a drop to roughly one-third. In Incheon, the increase rate has consecutively slowed for 10 weeks, starting from the first week of October (as of the 4th), moving from 0.44% → 0.42% → 0.40% → 0.38% → 0.37% → 0.33% → 0.29% → 0.25% → 0.22% → 0.17% → 0.13%.

By region, the increase rates in Yeonsu-gu and Seo-gu, which had maintained rapid rises, have both slowed. Yeonsu-gu, home to Songdo International City, saw the highest increase in Incheon at 0.64% in the first week of October, but this plummeted to 0.45% in the first week of November and further down to 0.12% in the second week of December. Seo-gu, which greatly benefited from the Cheongna International City effect, also saw a decline from 0.41% → 0.28% → 0.11% → 0.15% during the same period, continuing its downward trend.

The proportion of transactions where the actual transaction price was lower than the previous transaction price has also significantly increased. According to data on ‘Actual Apartment Transaction Price Trends in the Metropolitan Area’ submitted by the Ministry of Land, Infrastructure and Transport to Kim Hoe-jae, a member of the Democratic Party, the proportion of falling transactions in Incheon apartments last month was 39.6%. In other words, nearly 4 out of 10 apartment transactions in Incheon last month were conducted at lower prices. The proportion of falling transactions in Incheon has risen for three consecutive months since August, moving from 19.1% → 20.7% → 27.4% → 39.6%.

In fact, according to the Ministry of Land, Infrastructure and Transport’s actual transaction price disclosure system, a 189㎡ (exclusive area) unit in ‘Songdo Poonglim I-One Complex 6’ in Songdo-dong, Yeonsu-gu, was sold for 1.4 billion KRW on the 12th of last month. Compared to the highest price of 1.6 billion KRW recorded in August, this represents a 200 million KRW drop over three months.

The nearby ‘Songdo The Sharp Central City’ 59.9㎡ unit also changed hands for 750 million KRW on the 1st of this month, down 70 million KRW from the previous highest price of 820 million KRW in September. The ‘Verdium The First’ 74.9㎡ unit was sold for 888 million KRW on the 27th of last month, down 82 million KRW from the highest transaction price of 970 million KRW in October.

This trend is also evident in Cheongna International City. The 84.4㎡ unit in ‘Cheongna International Financial District Hanyang Sujain Lake Blue’ in Cheongna-dong, Seo-gu, changed hands for 864 million KRW on the 13th of last month. This is about 200 million KRW lower than the highest price of 1.055 billion KRW recorded in September. The Cheongna 29 Block Hoban Verdium 84.9289㎡ unit was traded for 765 million KRW on the 28th of last month, more than 100 million KRW lower than the highest price of 870 million KRW for the same unit that month.

The Hwaseong area, including Dongtan, has also turned to a downward trend for the first time in 2 years and 2 months. Apartment prices in Hwaseong for the second week of December fell by 0.02% compared to the previous week. For example, the Dongtan Station Central Yemiji 96㎡ unit recently traded for 1 billion KRW, down 170 million KRW from 1.17 billion KRW in October, indicating an increase in declining units.

The 86㎡ unit in ‘Dongtan Station Bando Yubora Ivy Park 8.0’ in Osan-dong was sold for 1.447 billion KRW in August, approaching the loan restriction threshold of 1.5 billion KRW, but changed hands at 1.39 billion KRW earlier this month, a drop of 100 million KRW. The 84㎡ unit in ‘Dongtan Demonstration Daeun Village Samsung Raemian’ in Bansong-dong, Hwaseong, was contracted for 805 million KRW last month, down 45 million KRW from 850 million KRW in October.

Song Seung-hyun, CEO of City and Economy, explained, “In major outer metropolitan areas such as Incheon and Dongtan, housing prices have risen significantly over time, leading to accumulated price fatigue among buyers, and expectations for further increases have diminished due to loan regulations and interest rate hikes. Additionally, with the presidential election coming next year, a wait-and-see attitude has continued, reducing transactions, which also seems to have had an impact.”

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