Unstoppable Apartment Price Decline... Seoul Falls for 22 Weeks, Drop Widens

Photo by Asia Economy

Amid a nationwide real estate market downturn, apartment sale prices in Seoul continued to decline for the 22nd consecutive week.

According to the weekly apartment price trend data for the 4th week of October 2022 released by the Korea Real Estate Board on the 27th, apartment prices in Seoul fell by 0.28%.

This marks a larger drop compared to last week (-0.27%) and is the biggest decline in 10 years and 4 months since June 11, 2012 (-0.36%). Apartment prices in Seoul have been weak for five consecutive months since the last week of May.

Songpa-gu recorded the largest decline among Seoul's 25 districts, falling by 0.43%. This is a wider drop than last week's -0.38% and the largest decrease in about 10 years and 3 months since the second week of July 2012 (-0.61%).

Dobong-gu and Nowon-gu, which recently ranked first and second in decline rates, fell by 0.40% and 0.36% respectively, showing a slight slowdown compared to last week (-0.42%, -0.41%).

Gangnam-gu and Seocho-gu dropped by 0.23% and 0.18% respectively, with the decline widening compared to last week (-0.20%, -0.16%).

The downward trend continued in northern Seoul areas such as Seongbuk (-0.38%), Eunpyeong (-0.35%), and Gangbuk-gu (-0.34%).

The Korea Real Estate Board analyzed, "Market expectations that the interest rate hike trend will continue for the time being and the dominant anticipation of further apartment price declines have led to a continued decrease in purchase inquiries. Transactions have been sporadically completed mainly through urgent sales, resulting in an expanded decline."

In Incheon, the decline widened from -0.41% last week to -0.48% this week, but Gyeonggi-do saw a 0.35% drop, narrowing the decline compared to last week (-0.39%).

Accordingly, apartment prices in the metropolitan area also fell by 0.34%, a slight decrease in the rate of decline compared to last week (-0.35%).

Despite positive factors such as the government's plan to designate lead districts in 2024, apartment prices in the first-generation new towns remained weak.

Seongnam Bundang-gu, home to Bundang New Town, saw its decline narrow from -0.29% last week to -0.17% this week, whereas Goyang City experienced a 0.28% drop this week, widening the decline compared to last week (-0.26%).

National apartment prices fell by 0.28%, the same as last week.

The decline in jeonse (long-term lease) prices became steeper.

Seoul apartment jeonse prices dropped by 0.32%, expanding the decline from last week (-0.30%). Except for the provinces (-0.21%), Seoul, nationwide (-0.32%), and the metropolitan area (-0.44%) continued to experience the largest declines since the Korea Real Estate Board began price surveys in May 2012.

The Korea Real Estate Board analyzed, "Due to the burden of interest on jeonse loans, the trend of switching to half-jeonse or monthly rent during new and renewal contracts continues, leading to decreased jeonse demand. The accumulation of jeonse listings and price adjustments have expanded the decline compared to last week."

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