Apartment prices are falling even in Seoul

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Apartment prices are falling even in Seoul

Apartment prices fell for the first time in 13 weeks, according to the Korea Appraisal Board (KAB), possibly affected by the government’s attempts to cool down the real-estate market.

The government-funded real-estate information provider said in a report Thursday that average sales prices for Korean apartments slid 0.02 percent this week.

This was the first time apartment prices fell since the second week of August, when they dropped 0.03 percent.

On Sept. 13, the government announced a series of measures to crack down on speculation and cool off the overheated real estate market.

The measures included restrictions on mortgages for multiple homeowners, and increases to the general real-estate tax for high-priced residences.

“Prices have slowed down as the impact of the Sept. 13 measures is beginning to show,” said Kim Eun-jin, head of research at Budongsan 114, an online real estate service provider. “Purchasing ability has been greatly reduced with the strengthening of loan restrictions and there are also expectations about the government’s policy to increase supply.

“We expect the market to be calm until late this year and early next year as there are other uncertainties, such as a possible interest-rate hike,” she added.

Seoul’s residential real-estate market had a bullish run earlier this year. Seoul apartment prices rose 7.20 percent so far this year compared to a 3.19 percent decrease in prices in areas outside the Seoul metropolitan region.

This week marked the first time Seoul apartment sale prices fell in 61 weeks, since the first week of September 2017.

According to the KAB report, Seoul’s apartment prices retreated 0.01 percent this week. Eleven districts south of the river in the capital city, which led much of the increases in apartment prices this year, fell by 0.03 percent this week.

Prices in affluent Gangnam District in southern Seoul fell by 0.09 percent this week, and prices in Gangdong District, also in southern Seoul, fell for the first time in 27 weeks.

Apartment prices in Yongsan District, central Seoul, which rose 10.49 percent this year on expectations of urban development projects, remained unchanged this week. Regions outside the Seoul metropolitan region declined by 0.05 percent.

Late last month, Minister of Land, Infrastructure and Transport Kim Hyun-mee said during an audit by lawmakers that the real estate market was stable since the Sept. 13 measures.

Prices for long-term deposit rentals, known as jeonse, were already seeing a downward trend. Jeonse prices fell this week by 0.04 percent in the overall apartment market, following a 0.04 percent fall the previous week.

BY CHAE YUN-HWAN [chae.yunhwan@joongang.co.kr]
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