From Gangnam and Yongsan to Gangdong, then Seongdong and Dongjak: Where Will Apartment Prices Fall Next?

[The Financial News] As the government tightens regulations on owners of multiple homes, listings are increasing and the upward trend in the Seoul Special Metropolitan City apartment market is slowing noticeably. The price correction that began in the Gangnam area has spread to the Han River Belt, sending some neighborhoods into decline for the first time in about two years. According to the Korea Real Estate Board (KREB) on the 19th, apartment sale prices in Seoul Special Metropolitan City rose 0.05% in the third week of March (as of the 16th) from the previous week. The gain narrowed from a 0.08% increase a week earlier. With many buyers still sitting on the sidelines, some urgent sales have been absorbed, and this appears to be reflected in the recent price adjustments.
In particular, Seongdong District and Dongjak District each recorded a 0.01% decline, turning downward in tandem. For Seongdong District, this is the first drop in about one year and 11 months, since the second week of March 2024 (-0.02%). Dongjak District is also seeing its first decline in about a year, since the first week of February last year (-0.01%).
Analysts attribute this weakness to an accumulation of listings, driven not only by more sales from multiple-home owners but also by end users in the Han River Belt looking to "trade up" to better locations. These overlapping factors have increased the supply of properties on the market.
The broader Han River Belt is also clearly losing momentum. Gangdong District, which turned negative last week with a 0.01% decline, fell a further 0.02% this week, marking a second consecutive week of price drops.
The Gangnam 3 Districts (Gangnam District, Seocho District and Songpa District) and Yongsan District, which had already moved into negative territory earlier, have now been falling for four straight weeks. Songpa District posted the steepest drop at -0.16%, followed by Seocho District at -0.15%, Gangnam District at -0.13% and Yongsan District at -0.08%.
By contrast, mid- to lower-priced areas are still rising, although the pace is slowing. The increase in Gangseo District shrank sharply from 0.25% to 0.14%. Jung District, Seoul and Seongbuk District (both 0.20%), Seodaemun District (0.19%) and Eunpyeong District (0.15%) also saw their gains narrow across the board. Market watchers interpret this as end users stepping back due to the burden of sharply higher asking prices over a short period. In particular, Gangbuk District rose just 0.02% and Dobong District 0.03%, bringing them close to a potential reversal into decline.
Among the 25 autonomous districts of Seoul Special Metropolitan City, only Yangcheon District and Geumcheon District saw their gains expand. Prices in Yangcheon District edged up from 0.13% to 0.14%, while Geumcheon District rose from 0.06% to 0.10%.
A slowdown in price growth is also evident across the broader Seoul metropolitan area. Nationwide apartment prices rose 0.02%, while the Seoul metropolitan area recorded a 0.05% increase. In Gyeonggi Province, prices climbed 0.06%, down from a 0.10% gain the previous week, and Incheon was flat.
Within Gyeonggi Province, Gwacheon-si fell 0.06%, extending its losing streak to five consecutive weeks, and Bundang District, Seongnam saw its growth rate slow from 0.26% to 0.11%. On the other hand, some areas such as Dongan District, Anyang (0.40%), Yongin Suji (0.29%) and Gwangmyeong-si (0.22%) continued to post gains.
Experts believe the market is likely to remain in a price-adjustment phase for the time being. Nam Hyuk-woo of the Woori Bank Real Estate Research Institute said, "Concerns about higher property-holding taxes following the announcement of official appraisal values could lead to additional listings even in the Han River Belt and nearby areas," adding, "The current correction trend is highly likely to continue for some time."
going@fnnews.com Choi Ga-young Reporter