Seoul Apartment Prices Fall for 7 Consecutive Weeks... Largest Drop in 2 Years and 2 Months

Korea Real Estate Board July 2nd Week Price Trends

As interest rate hikes and concerns over an economic downturn spread, the number of apartment listings nationwide has surged, while apartment prices in Seoul have fallen for seven consecutive weeks with the rate of decline widening.

According to the "Apartment Price Trends for the Second Week of July" released by the Korea Real Estate Board on the 14th, apartment prices in Seoul fell by 0.04%, expanding the decline from last week's -0.03%. The -0.04% change in Seoul apartment prices is the first time in about two years and two months since the second week of May 2020. Since turning to a decline in the fifth week of May, Seoul apartment prices have fallen for seven consecutive weeks, with the rate of decline increasing.

The Real Estate Board explained, "Although some high-priced transactions occurred in areas such as Seocho-gu during the second week of July, the continued accumulation of listings and weakened buyer sentiment due to concerns over base interest rate hikes led to an overall expansion of the decline across Seoul."

The 11 districts in Gangnam fell by 0.02%. Seocho-gu (0.03%) was the only district in Seoul to see a rise, mainly due to reconstruction in Banpo-dong and (quasi) new buildings. Songpa-gu (-0.03%) saw declines mainly in major complexes in Jamsil and Sincheon-dong, and Gangnam-gu (-0.01%) experienced listing accumulation and reduced buying demand mainly in Gaepo and Suseo-dong, continuing the overall downward trend in Gangnam.

The 14 districts in Gangbuk fell by 0.06%. Nowon-gu (-0.10%) saw declines mainly in large complexes in Sanggye-dong, Dobong-gu (-0.10%) in older buildings in Ssangmun and Banghak-dong, and Gangbuk-gu (-0.09%) mainly in Mia New Town. Eunpyeong-gu (-0.07%) continued to decline due to accumulated listings influenced by new supply in Jingwan-dong. Overall, the entire Gangbuk area showed a downward trend with an increasing rate of decline.

The metropolitan area’s sales prices fell by 0.05%, widening the decline from last week's 0.04% drop.

Gyeonggi Province fell by 0.04% again last week. Overall buyer sentiment weakened, with Gwangju-si (-0.21%) declining mainly in Taejeon and Yeokdong, Suwon Yeongtong-gu (-0.19%) affected by new supply, and Hwaseong-si (-0.16%) continuing to decline due to listing accumulation, maintaining the overall downward trend in Gyeonggi.

Incheon also fell by 0.07% following last week, as buyer sentiment weakened and new supply effects persisted. Yeonsu-gu (-0.13%) declined mainly in Songdo New City, Seo-gu (-0.12%) in Geomdan New City, and Namdong-gu (-0.08%) in mid- to low-priced areas of Guwol and Seochang-dong.

The provinces outside the metropolitan area maintained a 0.02% decline following last week. The five major metropolitan cities fell by 0.05%, while the eight provinces rose by 0.01%.

Daegu increased its rate of decline from -0.11% last week to -0.13% this week. Due to continued listing accumulation influenced by new supply, Jung-gu (-0.22%) declined mainly in Namsan and Daebong-dong, and Dalseo-gu (-0.22%) mainly in Daecheon and Wolseong-dong.

Sejong-si (-0.16%) also widened its decline from -0.14% last week, as new supply and listing accumulation effects persisted.

The nationwide real estate market, where listings are accumulating and localized price adjustments are occurring, is expected to fall into an even more severe transaction freeze due to the "big step" (0.5 percentage point interest rate hike) impact.

Park Won-gap, Senior Real Estate Specialist at KB Real Estate, said on the 13th, "The housing market will be significantly affected by the interest rate hikes," adding, "Since further rate hikes are expected this year, price declines are likely to continue for the time being."

Meanwhile, jeonse (long-term lease) prices are also continuing to decline due to ongoing listing accumulation. Jeonse prices in Seoul fell by 0.02%, the same as last week. The metropolitan area (-0.04% → -0.04%) also maintained its downward trend.

The Real Estate Board analyzed, "Due to the burden of loans from interest rate hikes and the preference for monthly rent, jeonse demand is decreasing and listings are increasing. Listings are accumulating mainly in complexes with relatively high price levels, resulting in a continued downward trend."

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