33% drop last year… Daegu up to 54.6%↓
Land prices fall after 12 years of decline
Last year’s land transaction volume fell to the lowest level in 10 years due to the long-term slump in the real estate market. The rate of increase in land prices also recorded the lowest level in six years.
The Ministry of Land, Infrastructure and Transport and the Korea Real Estate Agency announced on the 26th that the national land price increased by 2.73% last year. This is 1.44 percentage points lower than the previous year’s rate of increase (4.17%).
The rate of increase in the metropolitan area decreased from 4.78% to 3.03%, and in the provinces from 3.17% to 2.24%, compared to the previous year.
By city and province, four cities and provinces, including Sejong (3.25%), Gyeonggi (3.11%), Seoul (3.06%), and Busan (2.75%), showed higher land price increases than the national average (2.73%). When subdivided into cities, counties, and districts, Seongdong-gu, Seoul, saw the largest increase in land prices at 4.53%.
67 cities, counties and districts, including Gunwi, Gyeongbuk (4.36%), Hanam, Gyeonggi (4.23%), Ulleung, Gyeongbuk (4.07%), and Gwangmyeong, Gyeonggi (4.03%) were higher than the national average.
By use situation, commercial land showed the highest increase rate with a 3.25% increase. The former was 3.14%, the factory 3.07%, and the answer 2.74%. Residential use rose 2.12%, down 2.29 percentage points from the previous year.
On a monthly basis, land prices across the country fell 0.01% in November last year, the first decline in 12 years and 1 month since October 2010. In December, it fell 0.03%, further exacerbating the decline.
An official from the Ministry of Land, Transport and Maritime Affairs explained, “Land prices are also on a downward trend due to the economic downturn, such as the burden of financing due to the interest rate hike and the decrease in demand.”
In October of last year, 21 out of 250 cities, counties, and districts across the country showed a decline in land prices, followed by a decline in 109 cities, counties, and districts in December.
Last year, the total land transaction volume (including land attached to buildings) also decreased significantly.
Last year’s transaction volume was 2,209,000 lots (1,795.4 km2), down 33.0% from the previous year (3,296,622 lots). On an annual basis, it is the smallest amount in 10 years since 2012 (2,045,000 lots).
By region, the total land transaction volume in Daegu decreased the most by 54.6% from the previous year, and all 17 cities and provinces, including Seoul (-43.5%) and Sejong (-42.5%), decreased.
The net land transaction volume, excluding land attached to buildings, was also 974,000 lots (1675.6 km2), down 22.0% from the previous year (1,248,000 lots). This is the lowest level since 2013.
