Down KRW 400 Million in a Month, Not Even a Buyer Inquiry... Seongdong's Momentum Fades: What Happened?

'KRW 2.5 Billion Lending Barrier' Cools Seongdong and Gangdong

Seongdong-gu home prices fell 0.02% week on week
Turning negative for the first time in 32 weeks
Gangdong-gu home prices also fell for the first time in 33 weeks

Actual transaction prices and asking prices are showing a downward trend in Seoul’s Seongdong-gu and Gangdong-gu, where home prices have turned lower for the first time in more than 30 weeks. According to the Korea Real Estate Board, prices in Seongdong-gu fell 0.02% from the previous week in the second week of November, returning to a downward trend for the first time in 32 weeks since March 30, when they fell 0.02%. Gangdong-gu also recorded a negative change for the first time in 33 weeks since March 23, when prices fell 0.06%, declining 0.01%. The trend is seen as reflecting the spread of downward price pressure to districts near the Han River Belt, as high-intensity lending regulations have capped mortgage loans on homes with market prices above KRW 2.5 billion at KRW 200 million.

A property listing notice posted at a real estate agency in Seongdong-gu, Seoul, on the 12th. Yonhap News

According to the real estate industry on November 13, a unit measuring 84 square meters at Olympic Park Foreon in Dunchon-dong, Gangdong-gu, is being offered as a quick sale for KRW 2.7 billion, below its most recent transaction price of KRW 2.99 billion on October 24. The complex set a record high of KRW 3.195 billion on September 23. An 84-square-meter unit at Godeok Gracium in Gangdong-gu is also being offered as a quick sale for KRW 2.45 billion, KRW 100 million below its record high of KRW 2.55 billion on October 3.

In Seongdong-gu, actual transaction prices are also showing a downward trend, particularly for apartments valued at around KRW 2.5 billion. Raemian Oksu Riverzen in Oksu-dong set a record high of KRW 2.85 billion on October 1, but a unit changed hands for KRW 2.37 billion on October 26. Listings in the market are priced as low as KRW 2.5 billion. An e-Pyeonhansesang Oksu Park Hills unit set a record high of KRW 2.6 billion in May, but was sold for KRW 2.5 billion on October 30.

Real estate agencies in the area said that buyer demand has fallen sharply in recent weeks. The head of an agency near Haengdang-dong in Seongdong-gu said, "Inquiries from buyers have effectively dried up since last month, and asking prices have started to be adjusted. Many apartments in this area cost more than KRW 2.5 billion, but with mortgage loans capped at just KRW 200 million, buyer demand has weakened." An official at an agency near Dunchon-dong added, "After rising slightly in the first half of the year, home prices have remained flat. Transaction volumes have fallen due to lending restrictions, but sellers are not making substantial cuts to their asking prices. Buyers appear to be watching the market while considering the possibility of changes to the tax reform package."

A real estate expert predicted that the downturn in Seongdong-gu and Gangdong-gu is likely to spread to other parts of the Han River Belt, including Gwangjin-gu and Dongjak-gu. Ham Young-jin, head of Woori Bank’s Real Estate Research Lab, said, "Monthly transactions of Seoul apartments approached 9,000 in May but have recently fallen to the 3,000 range. With transactions down, some sellers appear unable to withstand interest-rate pressures and are adjusting their asking prices, which seems to have contributed to declines in price-change rates in some areas."

However, the downturn is unlikely to affect mid- and lower-priced apartments on Seoul’s outskirts. Seongbuk-gu rose 0.39%, accelerating from 0.30% the previous week, while Eunpyeong-gu and Gangbuk-gu also saw faster growth, rising 0.19% and 0.32%, respectively, compared with 0.17% and 0.26% the previous week. Ham said, "This year, apartments priced at KRW 1.5 billion or less accounted for 79% of transactions in Seoul, while those priced at KRW 900 million or less accounted for 50%. With buyers focused on homes they can afford, it will likely be difficult for the downturn to spread to the outskirts of Seoul, where mid- and lower-priced homes are concentrated." Meanwhile, Seoul’s apartment sales price index rose 0.07% from the previous week, extending its upward trend to 92 consecutive weeks.

This content was produced with the assistance of AI translation services.