Standard Prices of Homes Fall for 1st Time Since 2005

The standard prices of individual houses have fallen for the first time since the government set the prices four years ago, a survey released by the Land, Transport and Maritime Affairs Ministry yesterday said.

A fall in housing prices and forthcoming cuts in property and comprehensive real estate taxes are expected to reduce the tax burden of homeowners.

Based on a report by appraisers on the prices of 200,000 houses nationwide, the ministry said standard housing prices as of Jan. 1 dropped 1.98 percent from a year ago.

The standard prices of individual houses are used as the base for provincial governments to set prices of the estimated four million individual houses nationwide. Prices had steadily risen since 2005, when they were set by the government, growing 5.61 percent in 2006, 6.01 percent in 2007 and 4.34 percent last year.

By region, houses in Seoul suffered the steepest fall with 2.5 percent, followed by Gyeonggi Province with 2.24 percent and South Chungcheong Province 2.15 percent. In Seoul, the three top districts suffered heavy drops, with Gangnam falling 4.54 percent, Songpa 4.51 percent and Seocho 4.5 percent. The southern Seoul suburb of Gwacheon also suffered a fall of 4.13 percent.

Among 249 provincial regions, only Gunsan in North Jeolla Province saw prices of individual houses grow (1.26 percent). The rise there was attributed to the Saemangeum land reclamation project, the designation of a free economic zone, and attraction of large corporations to the region.

High-priced houses suffered large losses. Homes worth more than 900 million won (655,000 U.S. dollars) fell 3.41 percent in value, those under 900 million won and more than 600 million won (436,000 dollars) 3.39 percent, and those worth less than 200 million won (145,000 dollars) in the one-percent range.

aryssong@donga.com