SEOUL – Seoul's once-booming apartment market is showing signs of cooling, with average prices dipping below ₩40 million per 3.3㎡ (one pyeong) for the first time in five months. Data from the Ministry of Land, Infrastructure, and Transport, analyzed by real estate platform Zigbang, reveals the average transaction price per pyeong in Seoul during January was ₩39.96 million, a significant 5.2% drop from the previous month.

This downturn can be attributed to a confluence of factors impacting the domestic housing market. Tighter lending policies, implemented in the fourth quarter of last year, have significantly constrained buyer activity. Adding to the uncertainty, the recent political climate, including the ongoing impeachment proceedings, has further dampened market sentiment. External economic pressures have also contributed to the market's chill. These combined forces have resulted in frozen buyer sentiment, decreased transaction volume, and consequently, a decline in average transaction prices. The price drop reflects a decrease in high-priced transactions and a corresponding increase in lower-priced sales.

A district-by-district breakdown reveals a nuanced picture. Seocho-gu experienced the most dramatic decline, with the average transaction price per pyeong plummeting 12.6% to ₩76.39 million in January. Transaction volume in Seocho-gu also shrunk by approximately 40% to just 87 cases, largely due to a decrease in sales of high-value properties in prominent complexes like Raemian One Bailey.

Other districts mirroring this downward trend include Gangbuk-gu (-5.9%), Gwanak-gu (-5.6%), Eunpyeong-gu (-4.3%), and Gangseo-gu (-3.7%).

Conversely, several districts bucked the trend and registered price increases. Jongno-gu led the pack with a substantial 31% surge, driven by a new record high price for a 59㎡ unit in Kyunghee Palace Xi 3 Complex, which sold for ₩1.815 billion. Seodaemun-gu also saw a notable 10.7% rise, fueled by transactions of 59㎡ units in E-Pyeonhansesang Sinchon and Sinchon Prugio, priced between ₩1.35 billion and ₩1.545 billion. Other districts experiencing positive price movement include Yeongdeungpo-gu (6.3%), Yongsan-gu (5.8%), and Dobong-gu (5.7%).

The Seoul apartment market is currently undergoing a period of correction, with prices softening in many areas due to a complex interplay of factors. While some districts have demonstrated resilience and even growth, the overall trajectory points towards a cooling market. The future remains uncertain, as the market navigates ongoing economic and political headwinds. Market watchers will be closely monitoring upcoming data to determine whether this is a temporary adjustment or the beginning of a more prolonged downturn.