Seoul Apartment Prices... Continued Volatile Market Conditions

February Actual Transaction Price Index Decline Widens

March Index Decline Narrows

Dobong and Nowon Districts Continue Downtrend

Gangnam and Mokdong Show Polarized Upward Trends

[Asia Economy Reporter Kim Min-young] The real estate market ahead of the new government's inauguration is showing no clear direction. The decline in the actual transaction price index in February, which best reflects market sentiment, widened again, but the decline narrowed in March after the presidential election, indicating a volatile market. Areas like Gangnam and Mokdong, reflecting expectations of deregulation, show rising housing prices, while Dobong-gu and Nowon-gu continue to experience price declines, signaling signs of polarization between regions.

According to the Korea Real Estate Board on the 19th, Seoul apartment actual transaction price index in February fell by 1.02% compared to the previous month. This was the largest decline in 3 years and 1 month since January 2019 (-1.04%). Since the Seoul apartment actual transaction price index turned to a decline in November last year (-0.95%), it narrowed from -1.01% in December to -0.71% in January, but the decline widened again in February. The preliminary figure for March shows a further narrowing to -0.46%, indicating fluctuations. The actual transaction price index counts only reported transactions, making it the most accurate statistic reflecting market conditions. A Korea Real Estate Board official explained, "The decline in Seoul's February actual transaction price index was due to economic uncertainties such as interest rate hikes."

However, with President-elect Yoon Seok-yeol emphasizing deregulation of reconstruction and redevelopment after the presidential election and forming a new government, the market sentiment has shifted, especially in areas benefiting from these positive factors. The narrowing of the decline in the March actual transaction price index (preliminary) appears to reflect this sentiment. According to the Korea Real Estate Board's weekly apartment trends, Seoul apartment prices stopped declining and stabilized in April. In Gangnam-gu, apartment prices turned to a 0.01% increase on March 21 after the election and have continued to rise for four consecutive weeks. Seocho-gu shows a similar trend. As of the 11th, apartment prices in the southeastern region, including Songpa, Gangnam, and Seocho, rose by 0.01%. Apartments in Yangcheon-gu, which includes many reconstruction complexes in Mokdong, recorded a stable trend at the end of March and turned to a 0.01% increase last week.

On the other hand, during the same period, Dobong-gu and Nowon-gu continued their decline at -0.03% and -0.02%, respectively. Recently, the Presidential Transition Committee announced a temporary exclusion of capital gains tax surcharges for multi-homeowners, which is interpreted as reflecting a trend of moving toward owning a single, well-chosen property.

In particular, preference for the Gangnam area seems to have strengthened. According to the real estate big data company Asil, from March 10 after the presidential election to the 19th of this month, the largest increase in listings in Seoul was in Gangbuk-gu (15.2%), followed by Songpa-gu (14.0%), Yangcheon-gu (13.6%), and Gangseo-gu (13.25%). Meanwhile, during the same period, listings in Gangnam-gu increased by only 4.8%.

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