In the metropolitan area, the number of areas where apartment prices are turning downward is increasing. It is interpreted that the downward trend in house prices is spreading as transactions plummet and properties accumulate due to the combination of loan regulations and interest rate hikes. Following Eunpyeong-gu, Seoul, apartment prices in Gangbuk-gu and Dobong-gu fell for the first time in a year and seven months. Apartment prices in Siheung, Gyeonggi-do, which surged more than 30% this year, also fell for the first time in a year and four months. As the transaction cliff is also intensifying, the Seoul apartment transaction volume in November is expected to drop sharply to the level at the time of the global financial crisis in 2008.
According to the apartment price trend for the fourth week of December announced by the Korea Real Estate Agency on the 30th, apartment prices in Gangbuk-gu and Dobong-gu, Seoul fell 0.02% and 0.01%, respectively, from the previous week, turning downward. Following Eunpyeong-gu, which was the first to turn downward in Seoul last week, the number of regions that fell is increasing. Eunpyeong-gu continued its downward trend with an increase rate of -0.02% following last week’s (-0.03%).
In Seoul as a whole, the trading price rose 0.04% for one week, less than the previous week (0.05%). Of the 25 districts in Seoul, 14 autonomous districts saw their increase decrease compared to last week, while Gwanak-gu and Geumcheon-gu maintained the same level (0.00%). The Korea Real Estate Agency explained, “There were some favorable factors such as reconstruction and remodeling, or the number of undervalued mid-to-low-priced complexes rose, but the increase in apartment prices in Seoul decreased as the buying trend decreased in most areas.”
In the metropolitan area, apartment prices in four regions, including Hwaseong-si, Gyeonggi-do and Yeongtong-gu, Suwon, Siheung-si and Sujeong-gu, Seongnam, turned downward further. Siheung City recorded a decline of 0.04% this week, down 0.11 percentage points from the increase last week (0.07%). In Siheung, apartment prices soared 37.26% this year alone, making it the region with the largest rise after Uiwang in Gyeonggi Province. Uiwang maintained the same level (0.00%) as last week.
Dongan-gu, Anyang (-0.01%), which rose by more than 30% this year, Gwangmyeong (-0.01%), and Sujeong-gu, Seongnam (-0.02%) also turned to decline. The total apartment sale price in the metropolitan area rose 0.04%, a decrease of 0.03 percentage points from the previous week (0.07%). The rate of increase in apartment prices nationwide also recorded 0.05% this week, down from last week (0.07%). In Sejong (-0.57% → -0.63%) and Daegu (-0.03% → -0.04%), the decline widened.
In the case of jeonse prices, the increase in the metropolitan area (0.05% → 0.03%), Seoul (0.06% → 0.04%), and rural areas (0.08% → 0.07%) decreased from last week.
With the sharp drop in transactions, it is highly likely that the November apartment transaction volume in Seoul will fall to the level at the time of the 2008 global financial crisis. As of this day, the November transaction volume of Seoul Real Estate Information Plaza was 1351. Although the transaction reporting deadline (31 days) is still a little bit left, if it stays in the 1,300 range without a significant increase, it will record the lowest monthly trading volume since November 2008 (1163). The December trading volume counted up to this day also stood at 493.
Next year, the private and public sources are expected to supply more than this year. As a result of a survey conducted by Real Estate R114 on plans to sell private apartments next year for the construction industry, a total of 418,351 households are expected to be sold at 500 workplaces across the country. This is about 57% more than the average sale performance of private apartments (266,506 households) over the past five years (2017-2021).
By region, 204,225 households in the metropolitan area and 214,126 in rural areas are planned to be sold. In the metropolitan area, Gyeonggi had the most with 119,624 households, followed by Seoul with 48,589 and Incheon with 36,012. Busan has the most with 33,485 households. The government is planning to supply an ‘overwhelming amount’ to the market by next year, supplying 70,000 apartments through public and private pre-orders alone, and designating additional development zones in downtown areas such as Seoul.
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