The Second Largest Big Step Ever... Not a Single Metropolitan Area Apartment Sale Price Increased

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

[Asia Economy Reporter Kim Hyemin] The Bank of Korea's second-largest rate hike in history, a "big step" (a 0.5 percentage point increase in the base interest rate) after three months, is further cooling the buying sentiment in the housing market. As buying demand shrinks, there was not a single place in Seoul or the metropolitan area where apartment sale prices rose.

According to Real Estate R114 on the 16th, the apartment sale prices in Seoul in the second week of October fell by 0.04% compared to the previous week. Redevelopment apartments dropped by 0.07%, and general apartments fell by 0.03%.

In Seoul, apartment prices declined significantly not only in the Gangnam area including Songpa, Gangnam, and Gangdong but also in outer regions such as Geumcheon, Nowon, and Guro. Among the 25 autonomous districts, 14 saw declines, and 11 remained flat. By region, the declines were ▲Geumcheon (-0.02%) ▲Songpa (-0.11%) ▲Gangnam (-0.06%) ▲Nowon (-0.05%) ▲Gangdong (-0.04%) ▲Guro (-0.04%) ▲Dongjak (-0.03%).

In new towns, mainly the first-generation new towns such as Bundang, prices fell by 0.02% compared to the previous week. By region, the declines were ▲Bundang (-0.05%) ▲Pyeongchon (-0.03%) ▲Dongtan (-0.02%) ▲Ilsan (-0.01%) ▲Jungdong (-0.01%), while other areas remained flat.

In Gyeonggi and Incheon, southern Gyeonggi areas such as Seongnam, Hwaseong, and Suwon all fell, resulting in a 0.02% decline compared to the previous week. By region, the order was ▲Seongnam (-0.09%) ▲Gimpo (-0.08%) ▲Hwaseong (-0.06%) ▲Incheon (-0.04%).

The jeonse (long-term lease) market saw an accumulation of jeonse listings due to contract renewals and a preference for monthly rent, causing Seoul to fall by 0.07%. By region, the declines were ▲Gangdong (-0.28%) ▲Songpa (-0.2%) ▲Geumcheon (-0.16%) ▲Gwangjin (-0.1%) ▲Seongbuk (-0.1%). New towns and Gyeonggi/Incheon fell by 0.01% and 0.03%, respectively.

Im Byungcheol, head of the Real Estate R114 Research Team, diagnosed, "Since April, the base interest rate has been raised five consecutive times for the first time ever, rising to the 3% range for the first time in 10 years since October 2012. With the Bank of Korea implementing another big step after three months, the already cooled real estate market is becoming even more contracted."

Im added, "If the U.S. takes a giant step (a 0.75 percentage point increase in the base interest rate) next month, there is a possibility that the Bank of Korea will implement another big step at the last base rate decision meeting of this year. With the rapid interest rate hikes intensifying the transaction freeze and increasing downward pressure on house prices, the interest burden on the 2030 generation who invested in housing using low interest rates will increase further."

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