"Even With a 1 Billion Won Price Cut, No Buyers: Urgent Listings Pile Up in This Neighborhood [Real Estate AtoZ]"

Apartment Prices in Seongdong-gu and Dongjak-gu Turn Downward from Last Week
Is the Downturn Limited?
"The Key Factor Is the Timing of the Holding Tax Reform"

The sales prices of apartments in Seongdong-gu and Dongjak-gu, which led the rise in Seoul apartment prices along with the Gangnam area last year, have all turned downward. The price adjustment that began in the three Gangnam districts is now spreading across the entire Hangang Belt.

According to the weekly apartment price trend data for the third week of March (as of the 16th), released by Korea Real Estate Board on March 19, apartment sales prices in Seongdong-gu fell, particularly in Oksu-dong and Hawangsimni-dong, shifting from a 0.06% increase the previous week to a 0.01% decrease. After recording a 0.40% increase in the fourth week of January (as of the 26th), Seongdong-gu saw its growth slow to 0.36% in the first week of February (as of the 2nd). Over the following six weeks, the rate of increase continued to shrink: 0.34% → 0.29% → 0.20% → 0.18% → 0.06%, and this week it turned negative at -0.01%.

Residential area in Seongdong District. Photo by Jo Yongjun

Dongjak-gu, which had maintained a flat rate (0.00%) the previous week, also entered negative territory at -0.01%. Dongjak-gu had recorded a 0.51% increase in the third week of January (as of the 19th), ranking among the highest in Seoul at the time, but its growth rate has since slowed for eight consecutive weeks: 0.44% → 0.29% → 0.18% → 0.08% → 0.05% → 0.01% → 0.00% → -0.01%.

With Seongdong-gu and Dongjak-gu turning downward, the number of districts among Seoul's 25 autonomous districts that saw a decline in apartment sales prices has increased to seven, including the three Gangnam districts (Gangnam, Seocho, Songpa), Yongsan-gu, and Gangdong-gu.

Both areas are referred to as the “Hangang Belt” and, along with the Gangnam area, were key drivers of Seoul’s housing price increases last year.

In the case of Seongdong-gu, this year’s official posted price increase rate for multi-unit housing, reflecting last year’s rise in home prices, reached as high as 29.04%, while Dongjak-gu also saw a steep jump of 22.94%.

According to local real estate agencies, in the Seongsu-dong area of Seongdong-gu, the price drop of high-priced mixed-use complexes such as Acro Seoul Forest acted as a catalyst for the overall downturn in home prices.

The owner of a real estate agency in Seongsu-dong stated, "Occasionally, there are urgent listings offered at around 1 billion won below previous market prices, but there are hardly any transactions being completed," adding, "Since further price declines are expected, buyers are not actively moving."

In the areas of Wangsimni and Oksu-dong, some urgent listings are also appearing with price reductions of around 20 to 30 million won. Due to the land transaction permit system and loan regulations, buying demand has weakened, leading some owners with multiple properties to lower prices in order to sell before the capital gains tax surcharge is enforced.

However, transactions are continuing at a steady pace. An agent at another real estate agency in Oksu-dong commented, "This is a region with solid real demand, so even a slight price adjustment is enough for urgent listings to be absorbed."

In Dongjak-gu, where statistics show a turn into negative territory, there is no noticeable movement among sellers to lower asking prices.

The head of a real estate agency in Sangdo-dong said, "Currently, transactions have almost come to a halt," but added, "Even though deals are not being made, homeowners are not putting out urgent listings with lowered asking prices."

A representative from another agency in Sadang-dong also commented, "There are not many inquiries from buyers, but transactions are happening occasionally," and added, "There are no urgent listings with reduced prices or lowered asking prices."

Experts diagnose that the price adjustment trend in the Gangnam area is now affecting the Hangang Belt as well.

Ham Youngjin, Head of the Real Estate Research Lab at Woori Bank, analyzed, "Seongdong-gu and Dongjak-gu, along with the Gangnam area, saw significant rises in home prices last year," and stated, "The price drop in the three Gangnam districts is inevitably affecting these areas as well."

He added, "However, except for a few high-priced homes, the burden of holding taxes is relatively low compared to the Gangnam area, so the extent of price decline is likely to be limited. Unless property owners with multiple homes are in urgent need to sell, a wait-and-see attitude will likely continue until the government revises the holding tax."

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