A view of Jugong 5 complex in Jamsil, Songpa-gu, Seoul. yunhap news
Last month, house prices across the country turned downward for the first time in two years and ten months.
According to data from the Korea Real Estate Agency on the 15th, the nationwide housing sales price (including apartments, tenements and single units) in June fell by 0.01% from the previous month. It is the first time in two years and ten months since August 2019 (-0.05%) that monthly house prices have fallen nationwide.
By housing type, the national apartment price fell 0.10% last month, double the drop from the previous month (-0.05%).
Despite the government’s policy of easing loan regulations, strong lending regulations continue, and the Bank of Korea’s big step measures put pressure on lending rates to rise, which seems to be the result of a sharp drop in purchasing power.
In the first half of this year (January to June), apartment prices across the country fell 0.16%, while in the metropolitan area it fell to 0.47%. The decrease in the metropolitan area compared to the national level was relatively large.
In Seoul, apartment prices fell 0.08% last month, showing the same rate of decline as in February. Over the past six months, apartment prices in Seoul have fallen by 0.25 percent.
Apartment prices in Gyeonggi and Incheon fell 0.16% and 0.23%, respectively, last month, recording the largest monthly decline this year. The cumulative decline rates for the two regions from January to June were 0.56% and 0.61%, respectively.
Local apartment prices also fell for two consecutive months in May (-0.01%) and June (-0.06%). However, if the fluctuations in the first half were taken together, it was calculated that the increase was 0.13%.
Although downward pressure was strong on apartment prices nationwide, the prices of row houses and single-family houses remained strong.
In June, the price of row houses (villas) nationwide rose 0.04%, turning upward from the previous month (-0.02%). Detached house prices maintained their highest monthly growth rate (0.24%) for three consecutive months since April.
The jeonse market also declined as June entered the summer off-season. The nationwide housing jeonse price turned from a flat (0.00%) in May to -0.02% last month.
By housing type, jeonse prices for apartments have fallen this year.
It is interpreted that both apartment prices and jeonse prices, which have risen sharply over the past two years, are affected by downward factors and have entered a period of adjustment.
The nationwide apartment Jeonse price has declined for five consecutive months (-0.04% → -0.08% → -0.03% → -0.05% → -0.08%) since February. In particular, the Jeonse price for apartments in the metropolitan area continued to decline for six months this year, recording a cumulative decline of 0.64% in the first half of the year.
In the metropolitan area, the June Jeonse price in Incheon recorded the highest drop rate (-0.49%) this year, down 1.95% on a cumulative basis in the first half of the year.
In particular, the Jeonse price for apartments in Yeonsu-gu fell to 6.16% during this period. This is the highest rate of decline in an autonomous district as of the first half of 2003, when the Real Estate Agency started collecting statistics.
Jeonse prices for apartments in provinces fell in May (-0.02%) and June (-0.05%), but rose 0.19% in the first half of the year.
Daegu Jung-gu (-9.20%) and Dalseo-gu (-7.47%) recorded the largest decline in apartment rental prices. Sejong City (-7.39%) also fell sharply.
The real estate agency explained, “In Sejong, as the housing backlog continued, it affected the jeonse market, and in Daegu, the price of jeonse fell mainly in Jung- and Dalseo-gu, which is affected by new tenants.”
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