Seoul's apartment prices have risen for 86 consecutive weeks, setting a new record for the longest increase in history. However, the rate of increase has decreased for five weeks in a row, and Yongsan has also turned to a decline following the Gangnam area. With listings increasing by 17% over the past three months, there is growing interest in whether the overall rise in Seoul's housing prices will come to a halt.
According to the Korea Real Estate Agency, as of the fourth week of September (as of the 28th), the average apartment price in Seoul rose by 0.09% from the previous week, marking 86 weeks of continuous growth since the first week of February last year. This is the longest recorded increase based on weekly statistics. The cumulative increase rate stands at 17.58%, more than double the previous longest increase period from the second week of June 2020 to the third week of January 2022, which had a rate of 7.71%.
While the duration of the increase has extended, the rate of growth has diminished. The growth rate of Seoul apartment prices decreased from 0.29% in the fourth week of August to 0.22%, 0.20%, 0.16%, 0.13%, and finally 0.09% over the past five weeks.
Regionally, Gangnam saw a decrease of 0.56%, while Seocho and Songpa dropped by 0.33% and 0.19%, respectively. Yongsan also experienced a slight decline of 0.01%. In contrast, Seodaemun increased by 0.41%, and Dongdaemun and Seongbuk rose by 0.36% each, with Nowon up by 0.34%. Despite the adjustments in high-priced areas, the overall index for Seoul has maintained its upward trend due to continued increases in outer areas.
Housing inventory is also on the rise. A recent analysis by Aju Economy, based on daily listings from the real estate big data platform Asil, found that the number of apartment listings in Seoul increased from 61,670 on July 1 to 72,204 on October 1, a 17.1% rise over three months. Listings increased in 21 out of 25 districts.
In the past month, the number of listings has expanded even further. Compared to 67,382 listings on September 1, this represents a 7.2% increase, with 24 districts, excluding Geumcheon, showing growth. The three districts of Gangnam saw a 7.2% increase, while the remaining 22 districts also experienced a similar rise of 7.1%. However, this is still 2.5% lower than the 74,044 listings recorded at the time of the October 15 policy announcement last year.
The government has imposed restrictions on housing loans for purchasing homes in regulated areas since the June 27 measures last year, limiting the loan amount to 600 million won. The October 15 measures further classified all of Seoul as a regulated area and land transaction permission zone, reducing the loan limit for homes priced between 1.5 billion and 2.5 billion won to 400 million won, and to 200 million won for homes over 2.5 billion won.
Despite the increase in listings, if sellers maintain their asking prices, the market may experience a slowdown rather than a significant drop in transactions. Ham Young-jin, head of the real estate research lab at Woori Bank, stated, “An increase in listings and a drop in prices do not necessarily occur simultaneously. The loan regulations have made it difficult for buyers to secure funding, leading to a decrease in transactions, but sellers tend to either withdraw their listings or maintain their asking prices rather than urgently lowering them.”
The rental market also presents variables. In the fourth week of September, the average rent for Seoul apartments rose by 0.16%. Seongbuk, Gangbuk, and Nowon saw increases of 0.36% each, while Dobong rose by 0.30%. With both sales and rental prices increasing in outer areas, it may be premature to conclude that the overall market in Seoul will turn downward solely based on the increase in listings.
Ham noted that it is difficult to attribute recent changes solely to the effects of the October 15 measures. He explained that factors such as interest rates, total loan regulations, tax reforms, and the volume of new housing in different regions are all influencing buyers' and sellers' decisions.
He emphasized, “For Seoul to transition to a downward trend, it is essential that an increase in listings is accompanied by a downward adjustment in asking prices and a decline in transaction prices. It is crucial to observe whether the downward trend spreads beyond Gangnam to mid- and low-priced areas, and whether the increase in listings and price adjustments continue over several weeks.”
There are also calls to maintain loan regulations until housing supply translates into actual occupancy. Lee Seong-hoon, president of the Korea Land and Housing Corporation (LH), stated on September 30, “While there may be concerns about ‘kicking away the housing ladder’ and worries from actual demanders, I believe it is better to have stable loan regulations that allow housing prices to move gradually rather than experiencing sharp rises and falls.” He added, “We should also consider whether allowing first-time buyers to take on loans competitively, leading to continuous price increases, benefits our community.”
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.