For investors assessing Seoul’s apartment market, regional price direction matters more than the average growth rate. According to Korea Real Estate Board data for the first week of November reported by Maeil Business Newspaper, home prices across Seoul rose 0.07%, while the three Gangnam districts continued to decline. The figures show that even within the single Seoul market, actual transaction trends in high-priced neighborhoods must be evaluated separately from those in outer districts and northern Seoul.
Korea Real Estate Board’s Seoul Apartment Trends in Three Points
- Korea Real Estate Board data showed that average home prices across Seoul rose 0.07% in the first week of November.
- Seocho-gu and Gangnam-gu declined for a 13th consecutive week, while Songpa-gu extended its downturn to nine weeks.
- Several outer and northern Seoul districts outpaced the citywide average, including Seodaemun-gu at 0.31%, Seongbuk-gu at 0.30%, and Jungnang-gu at 0.28%.
Two Diverging Trends Hidden by Seoul’s 0.07% Average
At the citywide level, Seoul home prices increased. A district-level breakdown, however, reveals a very different picture. In the first week of November, the rate of change in Seocho-gu fell from -0.35% to -0.37%, while Gangnam-gu slipped from -0.38% to -0.39%, according to the Korea Real Estate Board. Both districts recorded their 13th consecutive weekly decline. Songpa-gu’s drop narrowed from -0.22% to -0.17%, but the district remained in negative territory for a ninth week.
Decoupling refers to prices in different areas of the same city moving in opposite directions. The latest data demonstrate why a single average cannot fully capture the strength or weakness of Seoul’s apartment sales market. Concluding that all of Seoul is weakening based solely on declines in Gangnam, or assuming a broad recovery from the citywide increase, could lead to assessments that diverge from actual transaction prices.
Apgujeong Transactions Reveal Scale of High-End Housing Correction
An exclusive-use 182㎡ unit at Apgujeong’s Shin Hyundai 12th complex fell from 11.25 billion won in July to 10 billion won in September and around 9 billion won in October. It traded for 8.8 billion won on the 14th of last month and 9.2 billion won on the 21st. Based solely on the transactions provided, prices fell by more than 2 billion won over a three-month period.
An exclusive-use 183㎡ unit at the Shin Hyundai 11th complex also declined from 12.8 billion won in December last year to 9.3 billion won last month, a difference of 3.5 billion won. However, the exact year and full terms of each contract, as well as the sellers’ actual motivations, were not confirmed. Rather than immediately treating individual deals as benchmarks for the entire Gangnam area, investors should monitor whether subsequent transactions in the same neighborhood confirm the trend.
Wolgye, Jeongneung, and Gireum Moved in the Opposite Direction
An exclusive-use 84㎡ unit at Lotte Castle Luna in Wolgye-dong, Nowon-gu, rose from 730 million won in September to 1.08 billion won one month later, a difference of 350 million won. An exclusive-use 84㎡ unit at Gireum New Town Kyungnam Honorsville in Jeongneung-dong, Seongbuk-gu, climbed by about 200 million won, from the 800 million won range in April and May to 1.05 billion won last month.
An exclusive-use 84㎡ unit at Gireum New Town Complex 2 Prugio rose from 1.18 billion won in July to 1.325 billion won three months later, a difference of 145 million won. District-level indicators moved in the same direction. In the first week of November, prices rose 0.26% in Gangbuk-gu, 0.25% in Guro-gu, 0.24% in Dongdaemun-gu, 0.2% in Dobong-gu, and 0.20% in Gwanak-gu.
Focus on Regional Transactions Before Individual Listed Stocks
The data did not establish any relationship between Seoul’s district-level price changes and a particular construction company’s or REIT’s orders, revenue, or property holdings. There is therefore insufficient evidence to portray rising prices in northern Seoul as a benefit for a specific listed company, or falling prices in Gangnam as a setback for one. Investment decisions should begin with the breadth of price gains and whether the Gangnam downturn persists, rather than with the name of a stock (ticker).
- Gangnam area: If the declines in Seocho-gu and Gangnam-gu extend beyond 13 weeks, the persistence of the regional trend will carry more weight than one or two short-term transactions.
- Outer and northern Seoul: Weekly gains accelerated from 0.12% to 0.14% in Nowon-gu, from 0.12% to 0.16% in Yeongdeungpo-gu, and from 0.14% to 0.17% in Eunpyeong-gu.
- Seoul average: With districts moving in different directions, the citywide average increase of 0.07% alone is insufficient to support a clear buy-or-sell decision.
Indicators to Watch for Broader Gains or a Prolonged Decline
- Monitor whether subsequent transactions at Apgujeong’s Shin Hyundai 11th and 12th complexes recover to earlier price levels.
- If the consecutive declines in Seocho-gu and Gangnam-gu end, assessments of the severity of the Gangnam correction will need to change.
- Watch whether districts with strong gains, including Seodaemun-gu at 0.31% and Seongbuk-gu at 0.30%, maintain their momentum in the next data release.
- President Lee Jae-myung cited falling actual transaction prices in key Seoul districts during a Cabinet meeting on the 4th. Subsequent price trends and actual transactions should be prioritized over policy statements.
Bottom Line on Seoul Home Prices
Seoul’s average rose, but the three Gangnam districts and the outer and northern parts of the city did not move in the same direction. Continued gains in outer districts could support the citywide average, but if the Gangnam downturn deepens, that average will become even less representative of conditions experienced in the market.
This article was automatically summarized and analyzed from the original news report. View the original article (Maeil Business Newspaper Economy)
