Due to government loan regulations and the real estate market recession, transactions of Seoul apartments are continuing at prices that have fallen by more than 20% compared to their peak.
According to an analysis of real transaction price data by ChosunBiz on the 16th, there were approximately 300 transactions in Seoul where the actual transaction prices for apartment sales fell by more than 20% over the past month compared to their peak from 2 to 3 years ago.
By district in Seoul, the most numerous transactions with price drops were found in ▲Nowon (57), ▲Songpa (22), ▲Seongbuk (21), ▲Dobong (21), ▲Gangseo (20), and ▲Guro (18).
In Nowon District, particularly in Sangye, 19 cases were recorded at prices that fell by 20-30% compared to their past peaks. The drop in transactions was not concentrated in a single complex but was widely distributed. The Sangye Daelim (59㎡) sold for 195 million won (a 30% drop) and 170 million won (a 26% drop), down from its peak price of 650 million won three years ago. The Eunbit 2 Complex (59㎡) also found a new owner in November at 480 million won (a 29% drop).
Last month, in Wolgye-dong and Junggye-dong, 16 and 14 cases of price drop transactions were recorded, respectively. In Wolgye-dong, the Deer 3 Complex (49㎡) sold for 297 million won (a 30% drop) compared to its peak price of 647 million won three years ago.
Wolgye-dong recorded three transactions for 49㎡ apartments at prices that dropped by 165 to 185 million won (20-22% drop) compared to their peak. The Misung, Miryung, and Samho Complex (Mimi Sam) also saw a drop in their 33㎡ units by 166.5 to 171.5 million won (23-24% drop). The 50㎡ and 51㎡ units also fell by 190 million won (22% drop) and 240 million won (27% drop), respectively.
In Junggye-dong, transactions at Junggye Green and Junggye Mujigae were recorded at prices that were 24-28% lower than their peak, with three transactions and one transaction, respectively.
The district with the second-highest number of price drop transactions in Seoul was Songpa. In Songpa, each of the districts of Geoyeodong and Munjeongdong recorded six price drop transactions. Last month, the Geoyeon 1 Complex had 38-39㎡ units drop in price by 199 million won (25% drop), and the 39㎡ units traded at 283 million won (28% drop). The Geoyeon 4 Complex also saw its 38-39㎡ units decrease in price by 229.5 million won (28% drop) and 179.5 million won (22% drop).
In Munjeong-dong, four cases of price drop transactions were recorded at the Munjeong Shiyoung Apartments compared to their peak. Three transactions for the 39㎡ units were recorded at prices ranging from 235 million to 253 million won (27-29% drop), and one transaction for the 46㎡ unit was recorded at 190 million won (21% drop).
In contrast, ▲Seongdong (2 cases), ▲Seocho (3 cases), ▲Jongno (3 cases), ▲Jung-gu (3 cases), ▲Yongsan (6 cases), ▲Yeongdeungpo (6 cases), ▲Geumcheon (7 cases), ▲Gwangjin (7 cases), ▲Gangnam (7 cases), ▲Mapo (9 cases), ▲Gwanak (9 cases), and ▲Jungnang (9 cases) had ten or fewer price drop transactions.
Real estate experts analyzed that the demand for transitioning to areas with good access to downtown Seoul or Gangnam has focused on the younger generation in their 30s and 40s, changing housing consumption patterns.
Park Won-gap, the real estate chief Commissioner at KB Kookmin Bank, noted, 'Unlike in the past, when popular areas with good access to downtown and Gangnam caused a ripple effect that raised prices in relatively unpopular areas as well, the dynamics of housing consumption are different now. Furthermore, since the rental prices are not rising significantly, gap investment is difficult.' He predicted, 'While there are almost no price drop transactions in areas with good access to Gangnam or many development benefits, areas with comparatively lower access will continue to see declines due to the transitioning demand for some time.'
Due to government loan regulations, the housing purchase sentiment is frozen, and the contraction of the Seoul apartment transaction market is expected to continue for the time being. Kim Eun-sun, the Deputy Minister of the Big Data Lab at Zigbang, said, 'Although the Bank of Korea has lowered the base rate twice in a row, the loan regulation measures are still strong, and the subdued purchase sentiment has not revived.' He added, 'The economic outlook remains poor due to concerns about export stagnation following the election of U.S. President Trump, and now political uncertainties, such as recent political turmoil, have been added, which is likely to prolong the contraction of the Seoul apartment market.'