Seoul, South Korea – Seoul's red-hot apartment market has finally cooled down after a 10-month surge that began in March of last year. Prices in lower-priced areas such as Nowon, Dobong, and Geumcheon have continued to decline, while even the premium districts of Gangnam and Yongsan have seen their growth rates slow.
Despite two interest rate cuts, ongoing mortgage regulations have dampened buyer sentiment among real estate investors. With the political climate becoming increasingly uncertain due to the impeachment proceedings, a wait-and-see attitude is expected to persist for some time.
According to the Korea Real Estate Board's weekly apartment price index released on Tuesday, Seoul's apartment prices remained unchanged for the week ending December 30th, marking the end of a 40-week upward trend that began in March of last year.
The board attributed the price stabilization to a combination of factors, including a seasonal slowdown in the real estate market and a more cautious approach from buyers amid tightening mortgage regulations. While there were still some localized price increases in sought-after areas with redevelopment projects, the overall market sentiment has turned more subdued.
Among the 25 districts in Seoul, 10 saw prices decline, with the most significant drops occurring in the northern part of the city. Nowon District, known for its large supply of older apartments, experienced a notable price decrease, particularly in non-redevelopment areas. Similar trends were observed in Eunpyeong, Dobong, Geumcheon, and Guro districts, where lower-priced homes are more prevalent.
While districts like Seocho and Gangnam continued to see prices rise, the pace of growth has slowed compared to the previous month. Before the implementation of stricter mortgage regulations in August last year, these districts had recorded monthly price increases of 0.59% and 0.39%, respectively.
Meanwhile, apartment prices in Gyeonggi Province and Incheon also declined, with the largest drops observed in Gwangmyeong and Pyeongtaek. All districts in Incheon reported price decreases.
The five major metropolitan cities and eight provinces also experienced price declines, while the city of Sejong saw a more significant decrease. As a result, the nationwide average apartment price fell by 0.03%.
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