Nationwide Apartment Prices Fall Like Falling Leaves... Seoul Sees Largest Drop in 10 Years and 4 Months

The Bank of Korea raised the base interest rate by 0.5 percentage points, and the real estate transaction market's winter is expected to prolong. On the 13th, a red light was on at a traffic signal near an apartment in downtown Seoul.

Amid prolonged stagnation in the real estate market due to interest rate hikes and concerns over an economic recession, the decline in apartment prices is also gradually increasing.

According to the apartment price trend data for the third week of October released by the Korea Real Estate Board on the 20th, apartment prices in Seoul fell by 0.27% compared to the previous week. This is the largest drop in 10 years and 4 months since June 11, 2012 (-0.36%).

Seoul apartment prices have been declining for 21 consecutive weeks since the last week of May, following an increase in listings due to the postponement of the capital gains tax surcharge on multiple homeowners.

By district, Nowon (-0.41%) and Dobong-gu (-0.42%) fell by more than 0.4%, and Seongbuk (-0.37%), Seodaemun (-0.31%), and Geumcheon-gu (-0.30%) also experienced significant declines.

In the Gangnam area, apartment prices in Songpa-gu saw a larger drop from -0.31% last week to -0.38% this week, while Gangnam (-0.20%) and Seocho-gu (-0.16%) also experienced an expanded decline compared to last week.

The Real Estate Board analyzed, "With falling transactions mainly involving urgent sales and continuous downward adjustments in listing prices, market concerns that the real estate downturn will deepen due to additional interest rate hikes have led to a cautious stance among buyers, resulting in an expanded rate of decline."

The transaction cliff continues endlessly. According to the Seoul Real Estate Information Plaza, the number of apartment transactions in Seoul in September was 555 as of the 19th of this month, about one-fifth of the 2,691 transactions in September last year.

The decline in apartment prices in Gyeonggi (-0.39%) and Incheon (-0.41%) is also steep. Accordingly, the decline in apartment prices in the metropolitan area increased from -0.28% last week to -0.35% this week.

This is the first time since the Korea Real Estate Board began surveying prices in May 2012 that apartment prices in the metropolitan area have shown a decline rate in the 0.3% range.

Apartment prices in Siheung City fell by 0.61%, doubling the decline compared to last week (-0.32%), and Gwangmyeong (-0.54%), Namyangju (-0.50%), and Hwaseong City (-0.50%) also saw declines exceeding 0.5%.

Apartment prices in provincial areas also recorded a larger decline of -0.21% compared to last week (-0.17%), with transactions mainly involving urgent sales.

Due to weakness in both the metropolitan area and provincial regions, nationwide apartment prices fell by 0.28%, marking the largest decline since the survey began.

Amid growing concerns over the spread of "Kkangtong Jeonse" (empty deposit lease), new Jeonse demand has sharply decreased, causing Jeonse prices to plummet.

Nationwide (-0.31%), metropolitan area (-0.41%), provincial (-0.22%), and Seoul (-0.30%) all recorded the largest declines since the Korea Real Estate Board began price surveys.

The Real Estate Board explained, "Due to the ongoing impact of interest rate hikes, new Jeonse demand is decreasing, and even at contract renewals, there is a trend of switching to half-Jeonse or monthly rent. Amid increasing inventory accumulation, falling transactions mainly involving urgent sales with contract expirations are leading the downward trend in listing prices, expanding the rate of decline compared to last week."

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