Residential market fell outside Seoul last month

Residential real estate transactions dropped significantly in July from the previous year, although the market in the Seoul metropolitan region was much stronger than non-metropolitan regions.

According to the Ministry of Land, Infrastructure and Transport Monday, the number of home transactions last month fell 13.6 percent year on year to 95,578 cases. However, the figure for July was 33.8 percent higher than the monthly average from 2011 to 2015, which was 71,000.

“Even though the transaction volume fell compared to the previous year, the figure rose compared to the average figure for the past five years since more people believed that housing prices will rise in the Seoul metropolitan area as many places in the region are expected to go in for redevelopment,” said Kim Ie-tak, a director at the Transport Ministry.

Transactions last month were the second highest for July since 2006, when the government started to compile the data in its current form. July transactions peaked last year at 110,675.

Transactions dropped by 0.8 percent in the Seoul metropolitan region, while they rose 6.9 percent in Seoul alone. However, the data clearly showed that the residential market was slow in non-metropolitan regions, where transaction volumes dropped 27.3 percent year on year.

The figure dropped the most in Daegu and Ulsan, two big cities in southeastern Korea. In Daegu, transactions fell 51.6 percent year on year to 2,648, and in Ulsan 47.9 percent to 1,587.

By types, apartment transaction fell 13.8 percent year-on-year, while the figure for single houses dropped 17 percent.

During the first seven months of this year, overall residential transactions reached 563,237, down 21.9 percent compared to the previous year. However, they were up 3.3 percent compared to the past five year’s average figure of 545,000.

Meanwhile, the number of a jeonse, or lump-sum deposit rental contract, and regular monthly rental transactions made last month recorded 110,211 last month, which is 10.1 percent lower than the previous year.

Jeonse and monthly rental transaction fell 9.7 percent year-on-year in the Seoul metropolitan region last month, and the figure for non-metropolitan region dropped 10.8 percent. Jeonse or rental contracts for apartment units fell 4.9 percent year on year and the figure for non-apartment residential homes dropped 14.2 percent during the same period.

BY KIM YOUNG-NAM [kim.youngnam@joongang.co.kr]