Seoul apartment prices fell 0.2% amid trading cliffs and high interest rates cold wave ... biggest drop in 10 years

View of downtown apartment complex from 63 Square in Yeongdeungpo-gu, Seoul[사진=유대길 기자 [email protected]]

In Seoul, house prices plummeted by hundreds of millions of won. This is because only stocks for sale with lower prices are being made as the buying trend has contracted due to concerns over the economic slowdown, interest rate hikes, and trading cliffs. As the actual transaction price was formed mainly on first-time sales, which fell by hundreds of millions of won, the prices of some complexes returned to before 2020, just before the real estate bubble occurred.

According to a survey by the Korea Real Estate Agency on the 6th, apartment prices in Seoul this week recorded -0.20%, a sharp decrease from the previous week (-0.19%). It is the biggest drop in 9 years and 10 months since December 3, 2012 (-0.21%). Apartment prices in Seoul have recorded negative fluctuations for the 19th week since the last week of May (-0.01%) survey.

By region, apartment prices in the southeast area (Gangnam District 4) fell from -0.14% last week to -0.16% this week. Apartment prices in Seocho-gu fell from -0.05% to -0.07% last week, and in Gangnam-gu from -0.10% to -0.13%. Songpa-gu recorded -0.27%, down 0.04 percentage points from the previous week (-0.23%), the largest drop in 10 years and 1 month since the first week of September 2012 (-0.28%).

In fact, in Seoul, a sharp drop of hundreds of millions of won continues. On the 26th of last month, the 84 m² dedicated to ‘Helio City’ in Garak-dong, Songpa-gu was traded for 1.38 billion won. Although it is a direct transaction price, the price is 1 billion won lower than the peak of last September (2.38 billion won). Considering that the actual transaction price for direct transactions in May was 2.14 billion won, such a drop in price is unusual.

The 84 m² dedicated to Raemian Crecity, Jeonnong-dong, Dongdaemun-gu, Seoul was also traded at 1.37 billion won on the 24th of last month, down 330 million won from the peak in September last year (1.7 billion won). The 84 m² dedicated to ‘Jangjang e-Pyunhansang’ in Sindang-dong, Jung-gu also traded 1.42 billion won on the 7th of last month, 200 million won lower than the 1.62 billion won of the previous 26th.

The decline continued in the ‘No-Do-Gang’ areas, where low- and mid-priced apartments were concentrated. In Dobong-gu (-0.37%), the decline was mainly focused on the construction of Dobong and Chang-dong, and in Nowon-gu (-0.36%), the decline was widened mainly in Sanggye, Junggye, and Wolgye-dong. Gangbuk-gu also fell 0.16% this week.

Incheon and Gyeonggi fell 0.31% and 0.26%, respectively, from the previous week. This is because the price gap between buyers and sellers has widened due to concerns over a decline in the real estate market, and trading mainly in complexes that have plummeted.

In Incheon, Jung-gu (-0.39%), Seo-gu (-0.36%) and Yeonsu-gu (-0.35%) fell sharply, while Gyeonggi-do was Suwon Yeongtong-gu (-0.71%), Seongnam Sujeong-gu (-0.54%) and Gwangmyeong-si (-0.54%). -0.40%), etc., showed a significant drop.

Despite the autumn moving season, the jeonse market also continues to be weak. This week, the Seoul Jeonse price fell 0.20%, a bigger drop than last week’s (-0.18%). It was the biggest decline since the third week of February 2019 (-0.22%).

Jeonse prices for apartments across the country fell 0.21 percent, just like last week. Metropolitan area (-0.28%→-0.27%), regional (-0.15%→-0.14%), 5 metropolitan cities (-0.24%→-0.23%), 8 provinces (-0.07%→-0.06%), Sejong ( -0.44% → -0.43%), the decline in all regions except Seoul has narrowed.

The Korea Real Estate Agency said, “The demand for new jeonse is declining sharply due to the burden of interest on jeonse loans due to interest rate hikes and the preference for reversal and renewal contracts.” seems to be,” he said.