Severe Drought in Seoul Apartment Transactions, 'Down to a Quarter of Last Year'

[Image source=Yonhap News]

[Asia Economy Reporter Cha Wanyong] The Seoul apartment market is experiencing a transaction slump at an all-time low level. Compared to the same period last year, it is only about one-quarter. Moreover, monthly transaction volumes have been setting record lows every month, indicating that the total transaction volume by the end of this year is expected to shrink even further.

According to the Ministry of Land, Infrastructure and Transport's Real Transaction Price Disclosure System on the 11th, the number of apartment transactions in Seoul from January to August this year was 9,367, which is only about one-quarter (26%) compared to 35,707 transactions during the same period last year. In particular, the monthly average transaction volume of 1,371 recorded in the first half of this year has sharply decreased in the second half. July recorded 657 transactions and August 480, breaking the lowest transaction records for two consecutive months.

The volume of pre-sale right transactions in Seoul has also sharply declined to an all-time low. From January to August this year, the total number of pre-sale right (including move-in rights) transactions for Seoul apartments was 52, the lowest for the same period since statistics began in 2007. Furthermore, there were zero pre-sale right transfers last month, marking the first time since related statistics were compiled in 2006.

As transactions freeze, price declines are accelerating. According to a survey by the Korea Real Estate Board, Seoul apartment prices fell by 0.15% in the first week of September compared to the previous week. This is the largest drop in 9 years and 1 month since the survey on August 5, 2013 (-0.15%).

Seoul apartment prices have been declining for 15 consecutive weeks since the survey on May 30 (-0.01%). The rate of decline has also expanded for the past 5 consecutive weeks.

Among Seoul’s 25 districts, apartment prices in Nowon-gu and Dobong-gu fell by 0.30% each, showing the largest decline within Seoul. Nowon-gu recorded its largest drop in 9 years and 9 months since December 3, 2012 (-0.39%), and Dobong-gu recorded its largest drop in 9 years and 7 months since February 11, 2013 (-0.62%).

The Gangnam area is also weak. Songpa-gu’s decline widened from -0.12% last week to -0.16% this week, and Gangnam-gu (-0.09%), Seocho-gu (-0.03%), and Gangdong-gu (-0.09%) all saw larger declines compared to last week.

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