Seoul apartment prices slide for four consecutive weeks

The apartment prices in Seoul have been on downward trend for four consecutive weeks, with a bigger drop, especially in Songpa and Gangdong districts. The downward trend is likely to continue for a while, as further interest rate hike is expected and concerns for global economic recession are looming large.

The weekly apartment prices trend announced by the Korea Real Estate Board on Thursday showed a 0.03 percent drop in Seoul apartment prices in the third week of June, continuing a streak of four consecutive weekly declines, with a much bigger drop compared to the previous week (-0.02 percent).

In Gangbuk, small-sized apartment prices in Seodaemun district dropped, whereas big apartment complexes saw a decline in prices in Sanggye and Junggye-dong in Nowon district (-0.05 percent). In Gangnam, Songpa-gu (-0.02 percent) and Gangdong district (-0.03 percent) saw a bigger drop. On the other hand, apartments in Seocho-gu that are subject to reconstruction and mid-to-large sized apartments increased in price, while apartments in Gangnam district saw no change in prices.

A slowdown in apartment prices is a nationwide trend. The prices of apartments dropped by 0.03 percent, recording the biggest drop in 2 years and 10 months since August 19, 2019 (-0.04 percent) The Seoul metropolitan area and regional area saw a decline by 0.04 percent and 0.02 percent respectively, showing a bigger drop than the previous week (-0.03 percent and -0.01 percent, respectively). The drop in jeonse prices stayed the same (-0.02 percent for nationwide and -0.01 percent for Seoul).

“The United States announced a further interest rate hike, and Korea is likely to follow suit,” said Hahm Yeong-jin, director of the big data lab at Jikbang. “The rise in interest rate directly shrinks housing affordability of those in real need, and the home purchase sentiment will decrease further.”


soon9@donga.com