Jamsil Els, the so-called 'Daejang Apartment' located in Jamsil-dong, Songpa-gu, Seoul is a representative example. The asking price for an apartment based on an exclusive area of 84 m², which is called the National Equilibrium, is below 2 billion won, which was considered the Maginot line. Currently, the apartment for sale (1st floor) is listed for 1.95 billion won at a negotiable price.
In October of last year alone, the highest price of an apartment was 2.7 billion won. In March of this year, the 24th floor was actually traded for 2.67 billion won. As the Bank of Korea accelerated the rate hike and the housing market froze, the actual trading volume was in the range of 2.3 billion to 2.4 billion won (10th to 18th floors) and 2.2 to 2.4 billion won (1st to 11th floors) in June this year. It is a fact that is happening.
Heliocity, a representative apartment complex in the Gangnam area in Songpa-gu, Seoul, is also under threat from the 2 billion won Maginot Line based on an exclusive area of 84㎡. At the beginning of last month, the actual transaction was completed on the 10th floor for 2.09 billion won. Although it was a direct transaction earlier this year, an actual transaction was made for 1.91 billion won (1st floor). In October of last year, the highest price was 2.38 billion won. As the actual transaction price, as well as the asking price, continues to fall, the residents are even trying to figure out the reason for the transaction. One or two outliers are the reason why the overall complex price formation has an impact. An industry official said, "Apartments for sale are coming out at a price hundreds of millions of won lower than the market price for various reasons such as taxes, debt, business funds, financial burden, and auctions. As it is not friendly, it has no choice but to influence end-users or the trading market in some way.”
Cases of falling house prices are appearing in Gangnam and other parts of Seoul, but transactions are not surviving. According to the Seoul Real Estate Information Plaza, the number of apartment transactions in Seoul in July this year was 639, the lowest since the statistics were compiled in January 2006.
The apartment transaction volume in August this year also fell below 300. It is the second time since February that the monthly transaction volume of apartments in Seoul fell below 1,000. Due to interest rate hikes and the widespread perception of high house prices, the transaction volume of apartments in Seoul shrank to 820 in February this year. Then, as the March presidential election and expectations for easing of real estate regulations were reflected, trading volume seemed to recover temporarily.
However, as the Bank of Korea accelerates interest rate hikes and increases the burden of interest on loans, the transaction cliff is deepening regardless of region. In Yongsan, where more than 37,000 apartment houses are concentrated, only two transactions were made in August this year. Mapo-gu and Seocho-gu also recorded only 7 transactions each.
According to the result of real estate information company Economic Manlab counting the first real estate buyers (collective buildings, land, and buildings) in the court registration information plaza, this year (January to July), the number of first-time real estate buyers nationwide was 267,066 last year (42 8,789), a decrease of 37.7%. It is also the lowest figure since related statistics began to be released in 2010.
However, real estate market officials do not expect the sharp decline in house prices to continue. While interest rate hikes continue, there will be temporary house price corrections and transaction cliffs, but a sharp decline in the level of the collapse will not be easy.
An official from a real estate agency in Yongsan-gu, Seoul, said, "Currently, there are many end-users who think that the price of their house will go down even if they want to sell the property, but the transaction is not going well." "If the government eases various regulations further and buying sentiment starts to revive, house price defense is expected in popular areas," he said.
By Kim Eun-jung, staff reporter firstname.lastname@example.org