The apartment prices in Seoul have been on downward trend for four consecutive weeks, with a bigger drop, especially in Songpa and Gangdong districts. The downward trend is likely to continue for a while, as further interest rate hike is expected and concerns for global economic recession are looming large.
The weekly apartment prices trend announced by the Korea Real Estate Board on Thursday showed a 0.03 percent drop in Seoul apartment prices in the third week of June, continuing a streak of four consecutive weekly declines, with a much bigger drop compared to the previous week (-0.02 percent).
In Gangbuk, small-sized apartment prices in Seodaemun district dropped, whereas big apartment complexes saw a decline in prices in Sanggye and Junggye-dong in Nowon district (-0.05 percent). In Gangnam, Songpa-gu (-0.02 percent) and Gangdong district (-0.03 percent) saw a bigger drop. On the other hand, apartments in Seocho-gu that are subject to reconstruction and mid-to-large sized apartments increased in price, while apartments in Gangnam district saw no change in prices.
A slowdown in apartment prices is a nationwide trend. The prices of apartments dropped by 0.03 percent, recording the biggest drop in 2 years and 10 months since August 19, 2019 (-0.04 percent) The Seoul metropolitan area and regional area saw a decline by 0.04 percent and 0.02 percent respectively, showing a bigger drop than the previous week (-0.03 percent and -0.01 percent, respectively). The drop in jeonse prices stayed the same (-0.02 percent for nationwide and -0.01 percent for Seoul).
“The United States announced a further interest rate hike, and Korea is likely to follow suit,” said Hahm Yeong-jin, director of the big data lab at Jikbang. “The rise in interest rate directly shrinks housing affordability of those in real need, and the home purchase sentiment will decrease further.”