The Rebound in Seoul’s Housing Market Sparks Hope for Metropolitan Area

Apartment Prices in Seoul on the Rise, Rebound Trend Spreading

The housing market in Seoul has experienced a steady increase in apartment prices for the past two months. This trend is further supported by the consistent rise in flat transactions, with over 3,000 cases recorded for the third consecutive month. The positive momentum in Seoul is also spreading to neighboring areas such as Gyeonggi-do and Incheon.

However, the situation is different for other regions in the country, where a cold wind continues to blow. Even within the metropolitan area, there are variations in temperature, indicating that a general rebound in the housing market remains uncertain. National house prices have remained unchanged for the third consecutive week. All eyes are now on when the rebound in Seoul and the metropolitan area will extend to other regions.

Inconsistent Growth Rates Across Seoul

The Korea Real Estate Agency reports that, as of the second week of July, the rate of change in weekly apartment sales prices across the country has remained steady at 0% for three weeks. While Seoul and the metropolitan area continue to witness an upward trend, the provinces still experience a downward trend due to various factors.

This week, house prices in the metropolitan area experienced the same increase of 0.04% for the third consecutive week. Seoul also recorded a similar upward trend of 0.04%, matching the growth rate of Jeonju (0.03%). In contrast, flat sales prices in other regions decreased by -0.04%, maintaining the decline seen in the previous week. Local house prices have been on a downward trajectory for over a year since June last year.

In contrast, Seoul and the metropolitan area have been experiencing an upward trend for the past two months, with the rebound becoming more evident.

Notably, the temperature differences between different regions in Seoul are starting to diminish. Until last week, 9 out of 25 autonomous regions in Seoul were still seeing a downward trend. However, this week, all regions except for Jungrang-gu (-0.02%), Gangbuk-gu (-0.01%), and Nowon-gu (-0.01%) managed to avoid a decline. It is worth mentioning that the decline in these three regions is closer to 0%, indicating stabilization.

Gangnam Districts Leading the Rebound

Within Seoul, the four districts of Gangnam, Seocho, Songpa, and Gangdong are witnessing the steepest increases in house prices. They experienced a 0.09% rise from the previous week. Songpa-gu has seen the highest rate of increase in Seoul for the past 10 weeks since May last year.

Clear Rebound Trend Raises Questions About Future Growth

The rebound trend in the housing market of Seoul and the metropolitan area is becoming increasingly evident, supported by various indicators.

Firstly, there is a consistent and steady trading volume. According to the Seoul Real Estate Information Plaza, Seoul’s apartment sales volume reached 3,340 last month (as of July 14), maintaining a level of 3,000 for the third consecutive month.

While this level is still relatively low compared to the average transaction volume of around 5,000 in the past year, it is important to note that the housing market is currently in its off-season. As the upcoming fall moving season approaches, it is expected that the trading volume will increase to normal levels.

The apartment sales volume in Gyeonggi-do has also remained above 9,000 units since last March. Despite expectations of a decrease after the spring moving season, it is noteworthy that the volume has remained constant for four months.

Improving House Buying Sentiment

House buying sentiment continues to improve steadily. As of the second week of July (from the 10th), the Seoul apartment sales supply and demand index increased by 0.9 points from the previous week, reaching 86.5 (compared to 85.6 previously).

While this number is still below the baseline of 100, indicating more sellers than buyers in the market, it is worth noting that the index has shown a consistent upward trend for 19 consecutive weeks until now.

Jeonse prices, which refer to long-term lease contracts in Korea, are also seeing improvements, with an increased growth range of 0.04% in Seoul and the metropolitan area (previously 0.02%).

All indications suggest that the rebound, which initially started in Seoul’s Gangnam area, is gradually spreading throughout the city and into larger areas in the metropolitan region. The focus remains on whether this trend can extend further to encompass other regions.

Yeo Kyung-hee, senior researcher at Real Estate R114, commented, “Buying sentiment in the metropolitan area is recovering overall, but significant regional differences are still apparent.” It is expected that the rebound area will expand gradually.

Apartment prices in Seoul have been on the rise for two months. The rebound trend is becoming more and more evident, with the number of flat transactions also recording more than 3,000 cases for the third consecutive month. There is also an atmosphere that the warm wind that started blowing in Seoul is spreading to the metropolitan area such as Gyeonggi-do and Incheon.

However, the cold wind is still blowing in the state. Even within the metropolitan area, there are some differences in temperature by region. This means that it is difficult to see a general rebound in the housing market. As if to reflect this, house prices across the country remained unchanged for the third week. Indeed, attention is focused on when the rebound in Seoul and the metropolitan area will spread to the states.

Weekly flat sales price change rate. / graphics = watch biz.

In Seoul, the fringes are also rising and spreading… Fat stays down

According to the Korea Real Estate Agency, in the second week of July (based on the 10th), the rate of change in the weekly sales price of apartments nationwide remained flat for the third week at 0%. In the case of Seoul and the metropolitan area, it continues to show an upward trend, while in the case of the provinces, the downward trend is still interpreted as influence.

This week, house prices in the metropolitan area recorded the same increase for the third week at 0.04%. Seoul also showed a similar upward trend as Jeonju (0.03%) at 0.04%. On the other hand, flat sales prices in the states recorded -0.04%, maintaining the same decline as the previous week. Local house prices have been on a downward trend for more than a year since the second week of June last year.

In the case of Seoul and the metropolitan area, the upward trend continues for about two months, and the rebound trend is becoming more evident.

In particular, in the case of Seoul, the temperature difference between regions that has been evident until now is also slightly decreasing. Even until last week, 9 out of 25 autonomous regions in Seoul were recording a downward trend.

This week, all but Jungrang-gu (-0.02%), Gangbuk-gu (-0.01%) and Nowon-gu (-0.01%) managed to escape the decline. It is also notable that the reductions in these three regions are closer to flat (0%).

The rate of change in apartment sales prices in major autonomous areas in Seoul. / graphics = watch biz.

In Seoul, house prices in the 4 Gangnam districts (Gangnam, Seocho, Songpa, and Gangdong) maintain the steepest increase, rising 0.09% from the previous week. Songpa-gu has been recording the highest rate of increase in Seoul for the 10th week since the second week of last May.

A clear rebound trend, will it lead to fat?

In Seoul and the metropolitan area, the rebound trend of the housing market is becoming increasingly evident. This is shown in various indicators.

First of all, it is clear that the trading volume is maintained consistently. According to Seoul Real Estate Information Plaza, Seoul apartment sales volume last month was 3340 (based on July 14 count), maintaining the 3000 level for the third month.

Given that the average transaction volume in the past 2020-2021 was around 5,000, it is still a small level. However, given that May-August is the off-season for the housing market, it is likely to increase to normal levels in the upcoming fall moving season.

Gyeonggi-do apartment sales volume has also maintained more than 9,000 units since last March. There was hope that trading volume could fall again after the moving season last spring, but it is worth noting that it has maintained its size for the fourth month.

Monthly apartment sales transaction volume trend. / graphics = watch biz.

House buying sentiment continues to improve. According to the Real Estate Agency, in the second week of July (from the 10th), the Seoul apartment sales supply and demand index was 86.5, up 0.9 points from the previous week (85.6).

A number below the baseline (100) indicates that there are more people on the market selling homes than buying them. It is still below 100, but it is worth noting that it has been showing an upward trend for 19 consecutive weeks until this week.

Jeonse prices also continue to improve, widening the range of increases in Seoul (0.04% → 0.05%) and the metropolitan area (0.02% → 0.03%).

In this way, you can read the atmosphere that the rebound that started in the Gangnam area of ​​Seoul is spreading throughout Seoul, and also spreading to large areas in the metropolitan area. Attention is focused on whether this trend can spread throughout the metropolitan area and into the states.

Yeo Kyung-hee, senior researcher at Real Estate R114, said, “The overall buying sentiment is reviving in the metropolitan area, but the atmosphere is also clearly regionally differentiated.” It is expected that the rebound area will increase one after the other. “

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