Fear of Consecutive Interest Rate Hikes... Seoul Apartment Real Transaction Price Index Hits Record Largest Drop

Apartment view in the Seoul area (Photo by Asia Economy DB)

[Asia Economy Reporter Ryu Tae-min] Amid the continued slump in the housing market, the actual transaction price index for apartments in Seoul this year has also fallen to an all-time low.

According to the August apartment actual transaction price index announced by the Korea Real Estate Board on the 18th, the Seoul apartment actual transaction price index fell by 2.56% following a 3.14% decline in the previous month. The cumulative decline from January to August this year was -6.63%, marking the largest drop since the Real Estate Board began compiling actual transaction price index statistics in January 2006.

The actual transaction price index is an index comparing the actual transaction prices with previous transaction prices, unlike price trend surveys centered on market prices. Although there are limitations such as unstable fluctuations when transaction volumes are low or abnormal transactions are included, it is considered to relatively accurately reflect recent market conditions.

Among the five major regions in Seoul, the Southeast area, which includes the Gangnam 4 districts (Gangnam, Seocho, Songpa, Gangdong), fell the most sharply by 3.16%. The Southwest area, including Yeongdeungpo, Yangcheon, and Gangseo districts, followed with a 2.80% decline, while the Northeast area, which includes the 'No-Do-Gang' (Nowon, Dobong, Gangbuk districts), fell by 2.41%, and the Northwest area, including Eunpyeong, Mapo, and Seodaemun districts, declined by 1.66%.

The actual transaction price indices for apartments in Gyeonggi Province and Incheon also fell by 2.52% and 2.45% respectively in August, causing the entire Seoul metropolitan area to drop by 2.53%. The indices for provinces (-0.52%) and metropolitan cities (-1.67%) also declined simultaneously. The nationwide apartment actual transaction price index fell by 1.88%, marking the fourth consecutive month of decline.

The Real Estate Board stated, “As the trend of interest rate hikes is expected to continue, buyer sentiment is increasingly shrinking,” and added, “It is highly likely that the actual transaction price index will continue to decline for some time.”

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