Seoul Apartment Prices Rise Slows for 10th Week... Eunpyeong-gu Also Declines

[Asia Economy Reporter Kim Min-young] Due to loan regulations, interest rate hikes, and the presidential election, housing purchase sentiment has weakened, causing apartment prices in Eunpyeong-gu, Seoul, to fall for the first time in 19 months. Eunpyeong-gu is the first area in Seoul where apartment prices have declined. In Gyeonggi-do, last week, Dongducheon, Hwaseong, and Suwon Yeongtong-gu turned negative.

According to the weekly apartment price trend for the third week of December (as of the 20th) by the Korea Real Estate Board on the 25th, apartment sale prices in Eunpyeong-gu fell by 0.03% compared to the previous week. The Korea Real Estate Board explained, "As listings accumulated and downward transactions occurred, apartment prices in Eunpyeong-gu declined for the first time in 1 year and 7 months since May last year."

The overall apartment price increase rate in Seoul also narrowed from 0.07% last week to 0.05%, marking the lowest in 9 months. Seoul apartment prices have seen a reduced rate of increase for 10 consecutive weeks since October 11 (0.17%). Gwanak-gu (0.00%) remained flat following last week, and Geumcheon-gu also stopped rising and turned flat. Among the 25 autonomous districts in Seoul, 15 saw a decrease in the rate of apartment price increases compared to the previous week.

Apartment prices in Gyeonggi-do rose by 0.11%, with the increase rate dropping by 0.04 percentage points from the previous week. Among 45 cities and counties nationwide, 34 showed a reduced rate of increase. Hwaseong-si (-0.02%) continued its decline from the previous week, and Suwon Yeongtong-gu fell by 0.01%, marking its first decline in 2 years and 5 months since July 2019. Uiwang-si also turned flat. Uiwang-si is an area where apartment prices rose by 38.57% this year alone due to the metropolitan express railroad (GTX) issue.

With the government's loan regulations combined with rising interest rates, market buying momentum is weakening, and price declines are beginning to take hold in various areas. As the government tightens the money supply, situations arise where buyers want to purchase but cannot, leading to a mood of ‘disappearance of buying demand → transaction cliff → accumulation of listings → price decline.’ This trend is especially pronounced in the outer areas of Seoul and Gyeonggi-do, where mid- to low-priced apartment complexes with high loan dependency are concentrated. According to housing statistics released by the Ministry of Land, Infrastructure and Transport, the number of sales transactions in the metropolitan area decreased by 14.1%, from 37,225 in October to 31,982, and Seoul dropped by 15.0%, from 9,584 to 8,147.

As buying demand cools, the proportion of apartment purchases by the 20s and 30s age group, which led the panning buying trend in Gyeonggi and Incheon areas, has also sharply declined. According to the Korea Real Estate Board’s data on apartment sales transactions by buyer age group, the share of apartment purchases by people in their 20s and 30s in the metropolitan area (Seoul, Gyeonggi, Incheon) was 35.6% in October, down 3.7 percentage points from 39.3% the previous month.

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