The drop in house prices in Seoul is gradually increasing. As buying sentiment froze, there were also transactions that fell by 400 million won in Namgajwa-dong, Seodaemun-gu. It is questionable whether it is a normal transaction, but the phenomenon of not selling even if it is put up for sale continues.
According to the weekly apartment price trend announced by the Korea Real Estate Agency on the 25th, the nationwide house price fell 0.14% in the fourth week of August, increasing the extent of the decline. Seoul recorded a decrease of 0.11% from the previous week (-0.09%). By autonomous district, 14 districts north of the Han River fell 0.16%, and 11 districts south of the Han River fell 0.07%.
In Gangbuk, Nowon-gu fell 0.23% mainly in Gongneung, Junggye, and Hagye-dong, followed by Dobong-gu (-0.22%) and Seongbuk-gu (-0.21%). In Gangnam, the decline was large in Geumcheon-gu (-0.11%), Songpa-gu (-0.10%), and Yeongdeungpo-gu (-0.10%). Seocho-gu and Yongsan-gu, which turned downwards last week, also fell 0.02%, widening the decline.
As house prices intensified, downtrends continued in various parts of Seoul. The 49m² dedicated to ‘Taegang’ in Gongneung-dong, Nowon-gu was changed to 570 million won on the 16th, down 80 million won from the highest price. The 59 m² dedicated to SK Bukhansan City, Mia-dong, Gangbuk-gu, also traded for 620 million won, down 160 million won from the highest price, on the 18th.
In response, the Korea Real Estate Agency explained, “Inquiries for purchases are quiet due to the expectation of additional interest rate hikes and concerns regarding the continued downward trend in housing prices.”
In Seodaemun-gu, a decrease of 400 million won also occurred. The 84 m² dedicated to ‘DMC Park View Xi’ in Namgajwa-dong, Seodaemun-gu was sold for 1.07 billion won on the 16th. It was sold for 1.49 billion won in September last year, a drop of 420 million won. Compared to the previous transaction made in June, it is 250 million won lower.
When a transaction that plunged 400 million won in an instant occurred, there was a debate in the real estate community over whether the transaction was normal or not. One netizen claimed, “House prices are finding their place,” while another netizens countered, “There is no sale at that price. The current asking price is around 1.4 billion won.”
While it is true that the price went down as buying sentiment weakened, officials from nearby brokerages agreed that it was not a normal transaction. An official from a brokerage firm in Namgajwa-dong explained, “It was originally for sale with a charter for 1.3 billion won, but it did not sell for 1.2 billion won.”
An official from a nearby brokerage company also said, “Suddenly, a brokerage transaction for 1.07 billion won came out, and all the companies in the area went into a riot.” It is a violation of the Attorney’s Act and the Administrative Judiciary Act to draw up a contract for a sale that is not directly brokered by a brokerage company, and can be punished by imprisonment for not more than 7 years or a fine of not more than 50 million won.
Meanwhile, house prices in the metropolitan area other than Seoul fell 0.26% in Incheon and 0.20% in Gyeonggi, and the decline widened. In Incheon, Yeonsu-gu (-0.29%), Gyeyang-gu (-0.29%), and Bupyeong-gu (-0.28%) fell sharply, while in Gyeonggi-do Yeoju (0.05%) and Icheon (0.04%) rose, while Uijeongbu (-0.38%) and Yangju City (-0.36%) and Gwangju City (-0.33%) showed significant declines.
Oh Se-seong, reporter at Hankyung.com sesung@hankyung.com
