Apartment Prices Start to Show Downward Trend

      January 07, 2022 12:15

      Prices of apartments in Seoul are finally showing signs of falling, and the downward trend is spreading across the country after several years of skyrocketing prices.

      The development comes amid the government's frantic efforts to stem real-estate speculation through punitive taxes as well as draconian borrowing restrictions, compounded by the Bank of Korea's signaling of further hikes in its benchmark interest rate.

      Even in popular districts like Gwangjin and Seongdong in Seoul, and Hanam in Gyeonggi Province, apartment prices have either stopped rising or begun to drop. Those in the administrative city of Sejong, Daejeon and Daegu are also in decline.

      In a sign of just how much the real estate market has cooled, some apartments in the capital are being put up for sale at hundreds of millions of won below market prices.

      /Yonhap

      According to the Korea Real Estate Board, the average apartment price in the Seoul metropolitan area edged up 0.03 percent as of Monday compared to a week ago. But the growth rate has slowed by 0.01 percentage point from a week ago, the lowest rate of growth in two years and four months.

      The situation is similar on the outskirts, with apartment prices rising just 0.02 percent in Gyeonggi Province and 0.07 percent in Incheon.

      In Seoul, prices in Dobong, Eunpyeong and Gangbuk districts declined 0.01 percent while those in Dongdaemun, Gwangjin and Seongdong districts remained flat. Apartment prices in Euijeongbu, Gwangmyeong, Hanam, Hwaseong and Siheung in Gyeonggi Province also fell between 0.02 and 0.03 percent. All of these areas saw property prices surge around 20 percent last year.

      The Korea Real Estate Board said, "Buying sentiment weakened, causing overall transactions to plummet and prices to shift to a decline."

      Many landlords or owners of multiple homes are also putting their apartments up for sale, even at slashed prices, to avoid punitive taxes, which would prompt a fall in apartment prices.

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