100 Million Drops... Even Thriving Songdo Staggers

Concerns Over Oversupply Added to High Price Recognition
Sales Performance Also Falls Short of Previous Years

[Image source=Yonhap News]

[Asia Economy Reporter Kim Hyemin] The real estate market in Songdo New City, known as the "Gangnam of Incheon," has been cooling off since the beginning of the year. Unlike last year when housing prices soared, listings are piling up, and transactions with price drops in the hundreds of millions of won have appeared.

According to the Korea Real Estate Board on the 10th, apartment sale prices in Yeonsu-gu, Incheon, where Songdo is located, have recorded negative changes for two consecutive weeks since the fourth week of last month. At the end of December last year, the rate was around 0.04%, but it halved to 0.02% at the start of the new year, then turned negative to -0.01% on the 24th of last month, and a week later widened the decline to -0.04%. The cumulative change rate is 0%, contrasting with the 3.4% recorded during the same period last year.

Given this situation, transactions with price drops in the hundreds of millions of won have been found. For example, an 84㎡ unit in Songdo SK View, which was traded at 1 billion won in December last year, dropped by 150 million won to 850 million won on the 5th of last month, just over a month later. Similarly, an 84㎡ unit in Songdo Poonglim I-One 3 Complex fell from 815 million won on December 14th last year to 785 million won on the 6th of last month, about 20 days later.

According to the Korea Real Estate Board, housing prices in Yeonsu-gu rose by 33.11% last year, marking the fourth highest increase nationwide. The rapid rise in Seoul housing prices due to the Seoul Metropolitan Area Express Train (GTX)-B line led many who could not afford Seoul prices to purchase apartments in this area, driving prices up significantly.

However, concerns about oversupply mixed with recognition of the peak price have intensified the price decline. According to Real Estate R114, the number of new housing units in Yeonsu-gu this year is 752, more than three times the 228 units from the previous year. New listings have been pouring in since the beginning of the year. A total of 3,544 units are scheduled for sale this year, all in the first half.

Sales performance has also not been as strong as in previous years. The "Songdo Lux Ocean SK View," held on the 7th and 8th, recorded a single-digit final competition rate despite its ocean view. Songdo Xi The Star, which recorded a competition rate of 13:1 in November last year, saw about 35% of winners cancel their contracts during the actual official contract process. An industry insider said, "Because prices rose so much, there is strong downward pressure," adding, "Unless the market environment changes, the adjustment period may continue for some time."

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