Average house price drops, even for smaller units

The average price of houses in Korea dropped for the first time in two years, data showed yesterday, offering another clear indication of the country’s struggling housing market.

The average price of homes across the country dropped 0.1 percent from a month earlier in July, according to the data released by Kookmin Bank, the largest bank in Korea. July marks the first time since July 2010 the average price of houses dropped from the previous month.

The drop was partly led by a dip in prices of large apartments, which fell for the second consecutive month in July.

But this time, the average price of smaller apartment units also fell from a month earlier, pulling down the average price of all houses in the country, according to the data.

The drop was more severe in Seoul and surrounding Gyeonggi that together are home to nearly half of the country’s 50 million population.

The average price of homes in Seoul slipped 0.4 percent from a month earlier in July with that of houses in the rest of the Seoul metropolitan area also dipping 0.4 percent.

Market observers believe the drop is partly caused by worsening economic conditions and high interest rates that discourage real estate investment.

Yonhap