Nationwide land prices rose 0.62% in Q3... Seoul alone topped the average

[Financial News] This year’s third-quarter land prices in Seoul rose 1.26%, making it the only one among 16 cities and provinces to exceed the national average.
On the 27th, according to the Ministry of Land, Infrastructure and Transport and the Korea Real Estate Board, nationwide land prices rose 0.62% in the third quarter, a slightly smaller increase than the 0.63% rise in the second quarter. The rate was down 0.01 percentage point from the previous quarter but up 0.04 percentage points from the same period last year (0.58%). Nationwide land prices have continued to rise since March 2023, with monthly increases holding at similar levels in the third quarter: 0.21% in July, 0.20% in August and 0.21% in September.
The gap between the Capital Metropolitan Area and other regions widened further. The Capital Metropolitan Area rose 0.89%, a larger increase than the 0.88% in the second quarter, while the rate in the provinces slowed from 0.19% to 0.14%. The gap between the two regions widened from 0.69 percentage point in the second quarter to 0.75 percentage point in the third. Seoul’s quarterly increase rose from 1.21% in the second quarter to 1.26%. By city, county and district, prices rose the most in Yongsan District, Seoul (2.24%), followed by Seongdong District (2.03%) and Seongbuk District (1.69%). Of the nation’s 256 cities, counties and districts, 44 exceeded the national average. In 174, prices remained within the 0.00% to 0.60% range, with increases concentrated mainly in the Capital Metropolitan Area.
Some regions saw declines. Jeju fell 0.28%, a steeper drop than the 0.25% decline in the second quarter. Gyeongnam turned from a 0.05% increase in the second quarter to a 0.07% decrease in the third. Land price changes for the Jeonnam-Gwangju Special Metropolitan City, launched on July 1, were calculated starting this quarter, and the city recorded 0.13%. By zoning designation, commercial areas rose the most, at 0.79%, followed by residential areas (0.75%) and industrial areas (0.58%). By use, commercial land (0.77%) and residential land (0.71%) posted the largest increases.
Land transactions fell sharply. Total land transactions in the third quarter, including land attached to buildings, amounted to about 408,000 parcels (219.7 km2). That was 75,000 parcels (15.6%) fewer than in the second quarter and 37,000 (8.4%) fewer than in the third quarter last year, and a 23.2% decrease from the average for the third quarter over the past five years. Transactions in vacant land, meaning land bought and sold without buildings, totaled about 124,000 parcels (196.1 km2). They were down 15.5% from the previous quarter and 12.9% from a year earlier, and 34.0% below the five-year third-quarter average.
By region, total land transactions increased in only two places: Daejeon (9.6%) and Incheon (3.0%). They declined in the other 13 cities and provinces. Seoul recorded 51,007 parcels, down 21.7% from the second quarter. Transactions in vacant land rose only in Busan (11.7%) and Gyeonggi (1.7%). By zoning designation, transactions in agricultural and forestry areas fell 37.6%; by land category, transactions in paddy fields fell 30.1%; and by building use, transactions in other buildings fell 30.6%—with steep declines across all three categories.
In Seoul, transactions have continued to decline even as land prices rise. Under last year’s October 15 Real Estate Policy, the government designated all of Seoul as a land transaction permit zone, with the designation in effect through December 31 this year. At a parliamentary audit by the National Assembly’s Land, Infrastructure and Transport Committee on the 7th of this month, Minister of Land, Infrastructure and Transport Hong Ji-seon said, “Given the current situation, we believe there is a certain level of demand for the land transaction permit system,” leaving open the possibility of an extension. Apartment sales in Seoul also fell 48.7%, from 8,900 transactions in May to 4,600 in August.

[email protected] Jeong Gyeong-su Reporter