Gyeonggi-do Apartment Actual Transaction Prices Decline for the First Time in 30 Months

November Last Year Gyeonggi-do Actual Transaction Price Change Rate Down 0.11% Compared to Previous Month

[Asia Economy Reporter Kim Min-young] The actual transaction prices of apartments in Gyeonggi-do, which had seen a surge in buying demand due to the balloon effect from the rapid rise in Seoul apartment prices, have turned to a downward trend for the first time in 30 months. As buying demand weakened due to strengthened loan regulations and interest rate hikes, the rising trend in Gyeonggi-do housing prices, considered an alternative residential area to Seoul, has also come to a halt.

According to the Korea Real Estate Board on the 18th, the apartment actual transaction price index in Gyeonggi-do recorded 167.4 in November last year, down 2 points from 167.6 in the previous month. This marks a decline for the first time in 2 years and 6 months since May 2019. The actual transaction price index is calculated using the rate of change in actual transaction prices of the same complex and area where transaction reports have been made more than twice. The average apartment price in Gyeonggi-do, which was 657 million KRW in October last year, also slightly fell to 644 million KRW in November.

The apartment actual transaction price index in Gyeonggi-do surged sharply from early 2020 as buyers who could not afford Seoul housing prices flocked to the alternative area of Gyeonggi-do. This index, which was 103.8 in early 2020, soared to 131.9 in early 2021 and rose to 165.1 in September last year. This means the average actual transaction price increased by nearly 60% over two years. According to KB Real Estate statistics, apartment prices in Gyeonggi-do surged by an average of 42.49% from January 2020 to October last year.

However, the price increase trend sharply slowed down in the second half of last year. The apartment price increase rate in Gyeonggi-do was 12.98% in the first half of last year but narrowed to 9.75% in the second half.

This decline in actual transaction prices is interpreted as being due to fatigue from prolonged price increases, interest rate hikes, and strengthened loan regulations. In fact, price declines are evident in areas such as Anyang, Siheung, Dongducheon, and Uiwang, which led the price rise due to the positive effects of the metropolitan area express railroad (GTX). According to the Ministry of Land, Infrastructure and Transport's actual transaction price disclosure system, an 84㎡ (exclusive area) unit in Indukwon Central Xi in Naeson-dong, Uiwang-si, was traded at 1.3 billion KRW in August last year, but two months later in November, it changed hands at 1.105 billion KRW, down by 195 million KRW.

Ham Young-jin, head of the Zigbang Data Lab, said, "Comparing apartment actual transactions over the past month with the previous month, not only has the number of transactions decreased, but the ratio of transactions at new lows exceeds those at new highs." He added, "Cases of transactions at lower prices than before have increased in areas such as Suwon Gwonseon, Hanam, Uiwang, Osan, and Yongin Giheung." He further stated, "With the combined effects of interest rate hikes, strengthened credit regulations, and seasonal off-peak periods, the transaction market is expected to take a breather for the time being."

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