Slight Increase in Nationwide Housing Sales in January "Recovery Is Premature"

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Although recent housing transaction volumes have shown signs of recovery, analysis suggests that the market is not yet at a level to expect a turnaround.

Housing Sales Transaction Volume Trends. [Image provided by Shinhan Bank Real Estate Investment Advisory Center]

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Shinhan Bank's Real Estate Investment Advisory Center stated in the 'April Shinhan Real Estate Market Report' that despite a slight increase in sales volume, it is difficult to say that buying demand has recovered. In January, nationwide housing sales reached 43,033 units, an increase of 4,997 units compared to the previous month, but the transaction volume remains low.

Kwon Young-sun, a real estate analyst at Shinhan Bank, said, "The 10-year long-term average annual housing sales volume is about 900,000 units," adding, "It is still far from that level." However, he also mentioned, "We expect the sales volume to increase significantly around the second half of this year."

According to the report, the housing transaction index for January remains below the baseline of 1.0. The January housing transaction index was 0.50→0.56 nationwide, 0.40→0.46 in the metropolitan area, and 0.59→0.66 in provincial areas. Particularly in Seoul, the index was 0.38, with severe transaction stagnation diagnosed in districts such as Nowon (0.27), Yongsan (0.30), Seocho (0.31), and Seodaemun (0.31).

Housing prices in February also fell by 0.14% compared to the previous month, continuing a decline for the third consecutive month. Especially, housing prices dropped significantly in Sejong (-0.95%) and Daegu (-0.43%), where supply issues remain. Housing prices in Seoul and the metropolitan area only decreased by 0.09% and 0.15%, respectively, compared to the previous month.

Only housing prices in Gangwon Province have maintained an upward trend nationwide. Gangwon housing prices rose by 0.09% compared to the previous month, showing steady growth since August last year. Transactions centered around newly supplied apartments in Chuncheon, Wonju, and Gangneung. This is believed to be influenced by increased expectations for improved accessibility to the metropolitan area, such as the construction of the Dongseo High-Speed Railway and the extension of the Metropolitan Area Express Train (GTX) Line B to Chuncheon.

Trend of the Housing Sales Price Index Rate of Change. [Image provided by Shinhan Bank Real Estate Investment Advisory Center]

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Analyst Kwon added, "Looking at the housing price index, except for Gangwon, other regions show a pattern of price increases followed by declines," and "Since August last year, only Gangwon has continuously maintained an upward trend."

Meanwhile, Shinhan Bank's Real Estate Investment Advisory Center analyzed actual transaction cases of commercial property sales over the past two years (January 1, 2022 ? December 31, 2023) and reported that the average sale price per 3.3㎡ in the Cheongdam, Apgujeong, and Sinsa commercial districts is approximately 176.03 million KRW.

Among these, the land on the left sector of Apgujeong Rodeo Station had the highest average sale price per 3.3㎡ at 202.62 million KRW. Shinhan Bank analyzed that the Apgujeong Rodeo Street commercial district has been revitalized by the influx of the MZ generation (Millennials + Generation Z). The land on the right sector of Apgujeong Rodeo Station followed with an average sale price of 188 million KRW per 3.3㎡. Within the Cheongdam, Apgujeong, and Sinsa commercial districts, the land in the southern sector of Sinsa Station had the lowest average sale price per 3.3㎡ at 147.57 million KRW.

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