Apartment Prices Decline Regardless of Region or Complex... KB Index Drops for Three Consecutive Months

KB Real Estate Apartment Sales Index 100.2
Declines Continue for 3 Consecutive Months from July
Other Regions and High-Priced Complexes Also Turn Down
Buyers' Cautious Sentiment Reaches Extreme Level

[Image source=Yonhap News]

[Asia Economy Reporter Hwang Seoyul] As the real estate market continues to stagnate, the nationwide sales price index has also been declining for three consecutive months. Even high-priced apartment complexes, including other provinces and the Gangnam 3 districts, which had shown steady upward trends until recently, have now entered a downward trend. The buyers' cautious stance appears to be reaching an extreme due to the falling sales prices.

According to the KB Real Estate monthly statistics on the 26th, the nationwide apartment sales price index for this month was recorded at 100.2. The base date for the sales price index (index=100) is January of this year. The index showed a slow upward trend until June (100.8), but since July, it has been declining for three consecutive months (100.7 → 100.4 → 100.2).

Regardless of the region, the previously hesitant upward trend seems to have shifted to a downward trend, starting like a round song. Other provinces, which had relatively continued to rise until recently, showed a flat trend last month (102.3) and a decline this month (102.2).

The sales price index in the metropolitan area, which first signaled a downward trend starting in May, was 99.7, lower than January of this year. Specifically, Incheon entered a decline first from May, followed by Gyeonggi (June) and Seoul (July). The sales price indices for Incheon, Gyeonggi, and Seoul this month were 99.2, 99.5, and 100.3, respectively. The five major metropolitan cities in the provinces have also been declining for three consecutive months since June (100.3 → 100.1 → 99.8 → 99.5).

Considering the widening decline and the increase in unsold properties, the government last week lifted the designation of adjustment areas in the provinces. However, experts predict that this will have minimal impact on real estate prices. Kim Inman, head of Kim Inman Real Estate Research Institute, said, "Although there are reactions such as homeowners withdrawing listings in areas where regulations have been lifted, the ongoing base interest rate hikes make it unlikely for housing prices to turn upward."

On the 14th, in a real estate-dense shopping area in Songpa-gu, Seoul, where the decline in real estate prices and the transaction freeze phenomenon continue, apartment listings with market prices are posted. Photo by Kang Jin-hyung aymsdream@

High-priced apartments have also recently entered a decline. The KB Leading Apartment 50 Index dropped by 1.12 points to 99.3 this month compared to last month (100.5). This is even lower than the value in January this year. The KB Leading Apartment 50 Index assesses the prices of the top 50 apartment complexes nationwide by market capitalization. Representative complexes used to measure this index include Helio City and Park Rio in Songpa-gu, Banpo Xi in Seocho-gu, and Eunma Apartment in Gangnam-gu, Seoul.

According to the Ministry of Land, Infrastructure and Transport's real transaction price disclosure system, the sale price of Helio City (84.97㎡) in Songpa-gu last month was 2.09 billion KRW, which was traded at a price 170 million KRW lower than a higher-floor apartment sold in March. Similarly, Raemian Prestige (59.89㎡) in Seocho-gu was sold for 2.55 billion KRW in the same month, which is 450 million KRW lower than the previous transaction in October last year (3 billion KRW).

The buyers' cautious stance is reaching an extreme. The nationwide buyer dominance index was 21.9 this month, the lowest since December 2008 (21.1). The buyer dominance index indicates more buyers when exceeding 100, and more sellers when below 100. As buyers remain cautious, the sales transaction index was also at 1.5, which is almost at the bottom level considering the index range is 0 to 200.

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