Clear Downturn... Seoul Districts with Falling House Prices Increase from 1 to 18 in 3 Months

Average Monthly Price per Pyeong in Nowon and Songpa Drops by 260,000 KRW in 3 Months... Largest Decline

[Asia Economy Reporter Kim Hyemin] The decline in Seoul apartment prices is becoming more pronounced. Following the monthly average apartment sale price falling for the first time in 40 months, the number of districts with declining average apartment prices has sharply increased within three months. This cumulative weekly decline is solidifying into a clear trend.

According to KB Kookmin Bank's monthly housing market trends on the 1st, 18 out of 25 districts in Seoul saw a drop in the average apartment sale price per square meter in August. The overall average price also fell to 15,542,000 KRW from 15,616,000 KRW the previous month. Converted to price per pyeong (3.3㎡), this represents a decrease of about 240,000 KRW. The average apartment sale price in Seoul also declined compared to the previous month, recorded at 1,278,790,000 KRW. This is the first time in 40 months since April 2019 (811,310,000 KRW) that the average sale price has dropped.

The number of districts with falling average house prices has also increased significantly. In Seoul, only Nowon-gu saw a price drop until May, but in June, it expanded to three districts including Nowon, Seodaemun, and Seongbuk-gu, then to 14 districts in July, and 18 districts in August. This is a substantial increase from 1 district to 18 districts in just three months.

The district with the largest decline is Nowon-gu. Since March, Nowon-gu has experienced a monthly average apartment sale price decline for five consecutive months. The price per square meter dropped from 11,296,000 KRW in March to 11,215,000 KRW in August, resulting in a decrease of about 260,000 KRW per pyeong over three months. The cumulative change rate during the same period was -0.55%, the largest drop among the 25 districts. According to the Ministry of Land, Infrastructure and Transport's real transaction price disclosure system, about 70 out of 137 transactions between June and August were at lower prices. For example, an 85㎡ apartment in Cheonggu 3rd Complex, Junggye-dong, fell from 1.37 billion KRW in January to 1.25 billion KRW in June, a drop of 120 million KRW in five months.

In August, only seven districts?Yongsan, Seocho, Yeongdeungpo, Gwangjin, Seongdong, Geumcheon, and Gwanak?saw price increases. Compared to the previous month, the rate of increase was stagnant. Yongsan-gu's apartment sale price per pyeong rose by 200,000 to 300,000 KRW monthly earlier this year, surpassing 60 million KRW per pyeong in June, but in August, it increased by only about 20,000 KRW compared to the previous month. If this trend continues, all 25 districts could see monthly average sale prices turn downward within the year.

The market analysis suggests that with both weekly price indices and monthly average prices falling, the real estate market has entered a full-fledged downturn. The soaring interest rates have reinforced the perception that housing prices will fall further, reducing housing demand. As listings accumulate, this trend is expected to continue for the time being. Currently, housing transactions are dominated by 'urgent sales' and even 'super urgent sales,' and if this situation persists for several months, it could become the established market price.

Park Wongap, Senior Real Estate Specialist at KB Kookmin Bank, said, "Due to consecutive interest rate hikes creating a tightening phase, a fear of overpaying has simultaneously emerged among buyers, causing a panic of over-purchasing. Buyers' sentiment has now bottomed out, and the wait-and-see stance will continue until interest rate hikes stop."

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