"Not Buying Seoul Apartments"... October Transaction Volume Falls Below 3,000 Units

Lowest Level in 9 Months Since January
80,000 Listings Accumulated Due to Lack of Demand
Prices Drop Even in Popular Large Complexes in Gangnam

In October, the volume of apartment sales transactions in Seoul hit its lowest point in nine months. As long-term high interest rates persist and the government tightens loan regulations, hesitation among actual buyers deepened, resulting in fewer transactions than in February, when housing prices were plummeting. With the severe accumulation of listings, cases of transactions in Gangnam?known as the 'housing price barometer'?being completed at prices several hundred million won lower than the previous deals are becoming increasingly common.

According to the Seoul Real Estate Information Plaza on the 1st, the number of apartment sales transactions in Seoul last month was 2,313, the lowest in nine months since January this year (1,412 transactions). Compared to 3,376 transactions in the previous month, this is a decrease of 1,063 transactions. The volume of apartment sales in Seoul fell below 3,000 for the first time since March (2,988 transactions). Notably, the October transaction volume was even lower than in February last year (2,454 transactions), when housing prices were declining due to the impact of high interest rates originating from the U.S. By district, the areas with the largest decreases in transaction volume were Songpa (258 → 142 transactions, down 116), Seongdong (168 → 93 transactions, down 75), and Yangcheon (174 → 112 transactions, down 62).

While many people want to sell, there are fewer buyers, causing Seoul apartment listings to accumulate endlessly. According to the real estate big data platform Apartment Real Transaction Price, the current number of apartment listings in Seoul is 78,518, approaching 80,000. This is a 44.8% increase compared to 54,211 listings a year ago. Earlier last month, listings exceeded 80,000, marking the highest level since Apartment Real Transaction Price began compiling this data in December 2020.

As the accumulation of listings worsens, homeowners are forced to lower asking prices, leading to a downward trend in housing prices. According to the Korea Real Estate Board, the provisional change rate of the apartment real transaction price index in October was -0.45%, likely ending the nine consecutive months of rising prices from January to September. By September this year, the market had recovered 13.4% of last year's decline in real transaction prices (-22.2%), but now it appears to be declining again. The real transaction price index is compiled by the Korea Real Estate Board based on all apartment transactions reported to local governments, using the contract date as the reference. Unlike sample surveys used to obtain weekly price trends, it compares actual transaction prices of apartments with previous transaction prices, reflecting market conditions relatively objectively.

Seoul apartment complex viewed from Namsan, Seoul Photo by Yonhap News

In fact, even in the Gangnam area, which boasts 'invincible housing prices,' transactions at prices several hundred million won lower than previous deals are occurring one after another. One of the popular complexes in Gangnam, Raemian One Bailey in Banpo-dong, Seocho-gu, with an exclusive area of 84㎡, was sold for 3.85 billion won on the 16th of last month, which is 450 million won lower than the highest price of 4.3 billion won in September. In Songpa-gu's Sincheon-dong, Parkrio 84㎡ was traded for 1.92 billion won on the 9th of last month, 250 million won lower than the October peak price of 2.17 billion won.

With even Gangnam, known as the housing price barometer, shaking, concerns are emerging that the downward trend could spread to other regions. The Korea Construction Industry Research Institute forecasted, "At the beginning of the year, housing prices rose due to deregulation, policy financing, and the launch of long-term mortgage loans, but next year, with tightened loan restrictions and growing concerns over prolonged high interest rates, the housing market is expected to reverse and decline again."

However, there is also a possibility that the atmosphere could change by the end of next year due to rising jeonse (long-term lease) prices caused by a decrease in new housing supply. Park Hapsu, an adjunct professor at Konkuk University Graduate School of Real Estate, said, "In the current market situation, chasing purchases is difficult, so a weakly stable market is expected to continue until the first quarter of next year," but added, "If interest rates are lowered and concerns about economic recession ease somewhat after the second quarter of next year, rising jeonse prices due to reduced new housing supply will become a significant upward factor, likely causing a slight increase in housing prices by the end of next year."

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