[딜사이트 김정은 기자] Apartment prices in Seoul continue to rise slightly. While the decline in apartment prices nationwide is increasing, the rate of increase in Seoul appears to have slowed significantly. It is analyzed that transaction volume has decreased significantly since the government’s recent strengthening of lending regulations and that a wait-and-see attitude is continuing due to fatigue from price surges.
According to the weekly apartment price trend report for the fourth week of November (as of November 25) released by the Korea Real Estate Agency on the 28th, nationwide apartment prices fell 0.02% following last week (-0.01%). Apartment prices in Seoul rose 0.04%, decreasing the increase compared to the previous week (0.06%).
Apartment prices in Seoul showed the highest rate of increase (0.32%) in 5 years and 11 months in the second week of August, and then the rate of increase was slowing. The rate of increase in apartment prices in Seoul was 0.11% in the second week of October, 0.09% in the third week, and 0.08% in the fourth week. Even in November, the rate of increase is 0.07% in the first week, 0.06% in the second week, and 0.04% in the third week, and the rate of increase is decreasing. This is the lowest increase in six months since the second week of May this year (0.03%).
Preferred complexes such as those scheduled for new construction and reconstruction in Seoul are showing an upward trend, recording new prices, but in other regions, there is a backlog of properties for sale due to the expansion of lending regulations and skyrocketing prices.
Gangnam-gu rose 0.13%, mainly due to the Gaepo and Apgujeong-dong reconstruction complexes. Yongsan-gu rose 0.08%, mainly in small and medium-sized complexes in Ichon and Hannam-dong. Seocho-gu showed an increase rate of 0.09%, mainly in Banpo-dong and Hannam-dong.
Apartment prices in Incheon continued to decline, mainly for construction complexes, falling 0.03%. Gyeonggi apartment prices remained flat.
Local apartment prices fell 0.05%, extending the same decline as the previous week. This is because the decline has increased in five major metropolitan cities, including Daegu and Sejong.
Meanwhile, the rental price of apartments in Seoul increased by 0.02%, a decrease in the increase compared to the previous week (0.04%). Rental demand continues to rise, mainly in preferred complexes, and rental prices continue to rise, but the increase in loan interest rates has led to downward transactions in some complexes, reducing the amount of increase.
Incheon rental prices increased by 0.02%. Complexes near stations in Bupyeong-gu and Gyeyang-gu led the rise in rental prices. Gyeonggi rose by 0.03%, mainly in new cities and areas near stations. Local areas remained flat (0.00%) compared to the previous week (0.01%).
The Korea Real Estate Board said, “In Seoul, rental prices are continuing to rise due to a continued shortage of properties for sale in preferred complexes such as those near subway stations and new construction,” adding, “We are seeing mixed trends, with downward transactions occurring in some outskirts and built-up complexes.”
ⓒLooking at the market with new eyes. Deal site unauthorized reproduction prohibited
What are the long-term implications for the Seoul apartment market if the current trend of ownership concentration in premium districts continues?
**Expert Interview: Analyzing the Current Trends in Seoul’s Apartment Market**
**Interviewer:** Welcome, and thank you for joining us today to discuss the current state of the apartment market in Seoul. With recent reports indicating that prices in Seoul are still rising, albeit at a slowing rate, what are the key factors contributing to this phenomenon?
**Expert:** Thank you for having me. Yes, currently, we are observing a complex situation in Seoul’s apartment market. While nationwide prices are generally declining, Seoul showcases a modest increase in prices, primarily driven by several factors. First, we have to consider the impact of real estate regulations imposed by the government. Recent measures to strengthen lending regulations have significantly dampened transaction volumes across the board, leading many potential buyers to adopt a “wait-and-see” approach, particularly after experiencing substantial price surges over recent months.
**Interviewer:** That seems to reflect a cautious sentiment among buyers. You mentioned a decrease in transaction volume. Could you explain how this influences overall price trends, especially in the context of new construction and reconstruction projects?
**Expert:** Certainly! The decrease in transaction volume puts a lid on speculative buying, leading to more stable price behavior over time. However, it’s essential to point out that certain preferred complexes—excellent locations typically undergoing reconstruction—continue to experience price increases. These properties often attract demand even in a broader market slowdown. The situation is somewhat paradoxical; while there’s a backlog of properties for sale due to tightening lending conditions and high prices in peripheral area, premium locations flourish because of their attractive prospects.
**Interviewer:** Notably, specific districts like Gangnam-gu and Yongsan-gu have shown positive growth. What’s your take on the performance of these regions compared to others?
**Expert:** Indeed, districts like Gangnam-gu, Yongsan-gu, and Seocho-gu have outperformed others. The increases in these areas can be attributed to established demand for well-located properties with potential for new developments or reconstruction. For instance, areas like Gaepo and Apgujeong-dong in Gangnam have surged due to ongoing reconstruction projects, making them very appealing to buyers. Conversely, regions like Incheon and Gyeonggi are struggling with stagnant or declining prices, reflecting a more considerable inventory glut and lower buyer interest.
**Interviewer:** With the reported decreases in nationwide apartment prices and rental increases in Seoul, how should potential buyers and investors approach this market?
**Expert:** For potential buyers, particularly in Seoul, I would recommend a targeted approach. Focus on regions with active construction and those that historically maintain strong demand. Given the rising rental market—where the demand for leasing remains robust—investors could consider purchasing in preferred complexes if they can navigate the lending landscape effectively. However, they should remain cautious about the broader market. With increasing interest rates affecting loan affordability, there’s a risk that if the current trend continues, we may see prices consolidate or even decline further in less desirable areas.
**Interviewer:** Lastly, looking ahead, what do you anticipate for the Seoul apartment market in the coming months?
**Expert:** The market response in the upcoming months will strongly depend on the government’s policy direction regarding lending and real estate regulations. If measures become more relaxed or if interest rates stabilize, we could see renewed transaction activity leading to potential price recoveries in selected areas. On the other hand, if prices keep rising significantly amidst tightening conditions, I expect the cautious sentiment to prevail, perhaps stalling growth or even prompting corrections in some parts of the market. Monitoring both demand indicators and economic factors will be essential for all stakeholders moving forward.
**Interviewer:** Thank you for your insightful analysis. It will certainly help our readers understand the nuances of the current housing market in Seoul.
**Expert:** Thank you for the opportunity to discuss this important topic. I look forward to seeing how this dynamic market evolves.
