Seoul Apartment Price Growth Slows as Government Lending Regulations Take Effect

The rate of increase in apartment sale prices across Seoul has slowed for a second consecutive week, indicating the visible impact of the government's latest lending regulations introduced on June 27.

According to weekly data released by the Korea Real Estate Board on July 10, the first week of July saw apartment prices in Seoul rise by 0.29%, marking a 0.11 percentage point decrease from the previous week. This trend, seen throughout the capital and satellite cities, suggests that the tightening of credit is beginning to have a concrete effect.

Districts within the so-called "Gangnam 3," long viewed as drivers of metropolitan housing price growth, experienced a particularly notable deceleration. Gangnam District’s price growth fell from 0.73% to 0.34%. Seocho District dropped from 0.65% to 0.48%, Songpa from 0.75% to 0.38%, and Gangdong from 0.62% to 0.29%.

The slowdown was not confined to the city’s south. In northern Seoul, Yongsan saw its rate fall from 0.58% to 0.37%, Mapo from 0.85% to 0.60%, and Seongdong from 0.89% to 0.70%. Previously surging districts such as Yangcheon (from 0.60% to 0.55%) and Yeongdeungpo (from 0.66% to 0.45%) also showed clear signs of cooling in the housing market.

A Korea Real Estate Board official noted, "While some newly constructed and redevelopment complexes continue to see upward trends, buyers are largely taking a wait-and-see approach. As a result, inquiries for purchases are on the decline, compressing price increases across Seoul overall."

In Gyeonggi Province, the areas of Bundang in Seongnam (from 1.17% to 0.46%) and Gwacheon (from 0.98% to 0.47%) saw particularly sharp drops in price growth. Across the wider metropolitan area, the rate ticked up by just 0.11%, a significantly slower pace than previously recorded. Seoul was up 0.29%, Gyeonggi Province by 0.04%, while Incheon reversed to a 0.03% decrease.

Outside the capital region, prices fell by 0.03%, marking 58 consecutive weeks of declines. The five major metropolitan cities dropped by 0.05%, and the eight provinces fell by 0.02%. Sejong, which had recently seen increases tied to presidential election speculation, saw its market stabilize.

Nationwide, apartment jeonse (long-term rental) prices continued to rise but only marginally, recording a mere 0.01% increase compared to the previous week. Seoul posted an increase of 0.08%, with demand concentrated near subway stations and large complexes, slightly widening the gap with last week. In contrast, the metropolitan area as a whole saw jeonse price gains slow from 0.05% to 0.03%, and non-metropolitan regions maintained a 0.01% decline.

Kim Hyo-seon, Senior Real Estate Specialist at NH NongHyup Bank, commented, "Since the June 27 announcement of new regulations, transactions at sellers' asking prices have decreased particularly in core areas, while expectations of falling prices have led to shrinking trade volumes."

Meanwhile, Suseong District in Daegu reported its first increase in apartment sale prices (up 0.07%) in 34 weeks since November 2024. All other districts in Daegu declined, marking 85 consecutive weeks of falling sale prices for the city overall.

Note “This article was translated from the original Korean version using AI assistance, and subsequently edited by a native-speaking journalist.”

Photo=Korea Real Estate Board