Apartment Prices in Gangbuk Return to Levels from One Year Ago... Average Falls Below 1 Billion Won

Average Apartment Sale Price in Gangbuk Area in October 995.76 Million KRW
Breaks Below 100 Million KRW After 10 Months... Decline Widens
Gangnam Area Also Approaching 1.5 Billion KRW Threshold... Clear Downtrend in Seoul Metropolitan Area

[Image source=Yonhap News]

[Asia Economy Reporter Kim Hyemin] As the real estate market enters a recession, apartment sale prices in the northern Seoul area are rapidly declining. Increasing numbers of falling transactions are pulling down the average price, breaking the 1 billion KRW barrier for the first time in 10 months. In the Gangnam area, buyer sentiment is also weakening, raising the likelihood that the average apartment price of 1.5 billion KRW will collapse.

According to KB Kookmin Bank's monthly housing trend report on the 25th, the average apartment sale price in the northern Seoul area in October was 995.76 million KRW. This is a decrease of 12.33 million KRW compared to the previous month, breaking the 1 billion KRW mark for the first time in 10 months. The northern Seoul area refers to the 14 autonomous districts north of the Han River, including Nowon and Dobong districts.

The average apartment sale price in the northern Seoul area had steadily increased on a monthly basis since October 2014. Even when the average apartment sale price in the Gangnam area declined from January to May 2019 due to government regulations, the northern area saw a slight increase. However, as the real estate downturn deepened, the upward trend was broken for the first time in July this year, eventually changing the leading digit.

The decline is also accelerating. The decrease in average sale price was only 0.5 million KRW in July compared to the previous month, but it grew to 2.38 million KRW in August, 3.03 million KRW in September, and expanded sharply to 12.33 million KRW in October.

This downward trend appears to be due to the rapid decline in housing prices in the outskirts of Seoul, such as Nowon, Dobong, Seongbuk, and Gangbuk districts. The average sale price per square meter for apartments in the northern Seoul area dropped significantly from 12.916 million KRW in September to 12.665 million KRW in October, with Dobong, Nowon, Seongbuk, and Gangbuk districts experiencing the largest declines in that order.

According to the Ministry of Land, Infrastructure and Transport's real transaction price disclosure system, an 84㎡ apartment in Hanshin, Dobong-dong, Dobong-gu, was traded on the 6th at 545 million KRW, nearly 200 million KRW lower than the previous highest price of 734 million KRW. Similarly, an 84㎡ apartment in SK Bukhan Mountain City, Mia-dong, Gangbuk-gu, was sold on the 7th for 650 million KRW, 240 million KRW less than the highest price of 890 million KRW recorded last November. While the average sale price has returned to the level of a year ago, actual transaction prices have effectively reverted to late 2020 to early 2021 levels.

In the Gangnam area, falling transactions have increased sharply, bringing the collapse of the average apartment price in the 1 billion KRW range within reach. The average apartment sale price in Gangnam in October was 1.51456 billion KRW. The situation across the entire Seoul metropolitan area, including Seoul, is not much different. The average housing price in the metropolitan area was 788.44 million KRW, falling below 800 million KRW for the first time in nine months. Gyeonggi Province also recorded 602.78 million KRW, and if the trend continues, it is highly likely to drop below 500 million KRW next month.

Considering the significant decrease in transactions and the current situation where sales are mainly focused on urgent sales, the decline could become even larger. Park Won-gap, Senior Real Estate Specialist at KB Kookmin Bank, said, "It is no different from saying that interest rates are determining house prices now," adding, "Until there is a signal that the interest rate hikes have ended, both transaction decreases and price declines will inevitably continue simultaneously."

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