First Ever Four Consecutive Base Rate Hikes... Apartment Price Decline Widens

Real Estate R114, Weekly Real Estate Trends in the Seoul Metropolitan Area

[Asia Economy Reporter Kim Hyemin] As the base interest rate has been raised four consecutive times, buying sentiment is further shrinking. Seoul apartment sale prices have fallen for four consecutive weeks, with the decline widening. Apartment prices in the first-generation new towns also dropped across all five new towns due to continued disappointment sales following government policies.

According to Real Estate R114 on the 3rd, Seoul apartment sale prices in the first week of September fell by 0.05% compared to the previous week. General apartments decreased by 0.04%, and redevelopment apartments dropped by 0.09%. The decline in redevelopment complex sale prices was the largest since the first week of May 2020, which recorded a -0.13% change.

In Seoul, 15 out of 25 autonomous districts experienced declines, with no areas showing increases. Particularly, Songpa and Gangdong, which have many high-priced apartments, saw significant drops. By region, the order was ▲Songpa (-0.19%) ▲Gangdong (-0.13%) ▲Seongbuk (-0.09%) ▲Seodaemun (-0.08%) ▲Gwanak (-0.07%) ▲Guro (-0.07%).

In new towns, mainly the first-generation new towns declined, falling 0.02% compared to the previous week. By region, the order was ▲Pangyo (-0.06%) ▲Pyeongchon (-0.04%) ▲Ilsan (-0.03%) ▲Sanbon (-0.03%) ▲Dongtan (-0.03%) ▲Bundang (-0.02%) ▲Jungdong (-0.02%), while other areas remained flat. Gyeonggi and Incheon fell by 0.05% compared to the previous week. By region, the order was ▲Incheon (-0.12%) ▲Suwon (-0.08%) ▲Namyangju (-0.05%) ▲Hwaseong (-0.05%).

The jeonse (long-term lease) market shows little demand movement ahead of the autumn moving season. Seoul fell by 0.06% compared to the previous week. By region, the order was ▲Seodaemun (-0.19%) ▲Songpa (-0.17%) ▲Dongdaemun (-0.14%) ▲Gwanak (-0.12%). New towns and Gyeonggi·Incheon fell by 0.03% and 0.05%, respectively.

Im Byungcheol, head of the research team at Real Estate R114, said, "If the Bank of Korea's Monetary Policy Committee maintains the base interest rate hike trend and the base rate reaches 3.0%, it will mark the first time in 10 years since July 2012 that the base rate enters the 3% range." He added, "With consecutive rate hikes dampening buying demand and delays in policy decisions on easing regulations such as comprehensive real estate tax and redevelopment, market uncertainty is increasing, which could lead to a prolonged transaction freeze due to weakened buying sentiment."

Im also said, "Although jeonse listings are increasing, demand is not keeping up. We need to observe the autumn moving season situation further, but due to the impact of rate hikes, it is expected that moving demand will not increase significantly as before."

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