Seoul apartment prices fall for a 16th consecutive week

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Seoul apartment prices fall for a 16th consecutive week

Published: 18 Sep. 2022, 18:00

An apartment complex in Songpa District, southern Seoul is seen from the Lotte World Tower on Thursday. [NEWS1]

Apartment prices in Seoul dropped for the 16th week straight and the most in a one-week period and in a one-month period since the global financial crisis in 2012, according to the Korea Real Estate Board (REB) Thursday.

Prices fell 0.16 percent in the second week of September compared to a week prior, the biggest drop in 9 years and 9 months when the weekly figure dropped 0.17 percent on Dec. 10, 2012.

The cumulative drop during the 16-week period is 1.08 percent.

In Seoul, apartment prices in all 25 districts fell. Prices in Dobong District, northern Seoul, fell by 0.31 percent, the biggest drop, followed by Nowon District's 0.29 percent and Seodaemun District's 0.27 percent.

In the southern Seoul region, prices in Gangnam District fell 0.05 percent and those in Songpa District 0.18 percent, a steeper drop compared to the first week of September.

"Consumer sentiment is weakening fast due to factors such as concerns over the additional interest rate increases," the REB explained.

"Fewer purchases were made during the Chuseok holidays and prices dropped sharply due to intermittent distressed sale transactions and efforts to lower the sales prices."

Jeonse prices continued to drop as well.

The price fell 0.12 percent in Seoul and 0.19 percent in capital areas and 0.14 percent nationwide.

The overall housing price in Korea, including apartments and row and detached houses, is dropping fast.

The national price index dropped 0.29 percent on month in August, the biggest decline since the global financial crisis in January 2009, according to the REB.

The fall in apartment prices led to an overall drop. Apartment prices nationwide dropped 0.51 percent last month, which was the fastest drop since Jan. 2009.

House prices in Seoul fell 0.24 percent this month and apartment prices 0.45 percent.

Weak consumer sentiment is driving the falls.

The sentiment toward purchasing houses dropped the fastest since the data were collected in 2011, according to Korea Research Institute for Human Settlements' report. The consumer sentiment index on housing sales in the country was 89.9 in August, down 5.3 points compared to July.

It is the fourth consecutive monthly fall and the lowest since the data were collected in March 2011.

The index ranges from 0 to 200, where below 95 means the price moves downwards, from 95 to 114 stable or minimal change and over 115 price moves upwards.

The consumer sentiment index in the capital area's real estate market was 87.6 last month, down 5.1 points compared to the prior month. The figure in Seoul dropped 6.6 points to 87.5 and that in Gyeonggi 4.4 points to 88.0. These two figures dropped for two consecutive months, and are also the lowest since the data were first collected.

BY KIM WON [cho.jungwoo1@joongang.co.kr]