Seoul Apartment Sales Fall to 9-Year Low

Skyrocketing prices and draconian borrowing restrictions have sent the number of apartments that were sold in Seoul last year to a nine-year low.

According to the Seoul Metropolitan Government, 41,713 apartments were sold in 2021, just half the previous year's 81,193 and the fewest since 2012. Transactions declined particularly in parts of Seoul with large numbers of mid- to low-priced apartments.

Just 1,819 apartments were sold in Dobong in northeastern Seoul, down a whopping 58.4 percent on-year. In Gangbuk numbers dropped 57.5 percent and in Nowon 56 percent.

Realtors believe the trend augurs an across-the-board drop in apartment prices in the capital. In 2012, when sales volume plummeted, apartment prices in Seoul fell 6.65 percent. Last year, they soared 7.76 percent but plummeted toward the end.

But so far apartment prices have been dropping only in Eunpyeong in northwestern Seoul in the third week of December, gradually spreading to Gangbuk and Dobong.

Market analyst Koh Jong-hwan said, "The housing price decline in 2012 was caused by the supply of affordable homes amid a sharp drop in demand. This time demand has calmed down and added supply should effectively tame real estate prices."

But the government's attempt to quell demand by strengthening curbs on housing loans is feared to make homes affordable only to the haves. Curbs on borrowing have dampened demand for mid- to low-priced apartments, but demand for upscale apartments over W1.5 billion is unaffected since they don't qualify for housing loans and are usually bought for cash anyway (US$1=W1,194).