Seoul apartment prices rose for an 86th consecutive week, setting a record for the longest streak of gains. The pace of those gains, however, has slowed for five straight weeks.
Apartment sale prices in Seoul rose 0.09% from the previous week as of Sept. 28, according to the weekly apartment price report for the fourth week of September released by the Korea Real Estate Board on the 1st. The streak surpassed the previous record of 85 weeks.
While the record is new, the strength behind the rally is fading quickly. Weekly gains in Seoul apartment prices eased from 0.29% in the fourth week of August to 0.22% in the fifth week, 0.20% in the first week of September, 0.16% in the second week, 0.13% in the third week and 0.09% in the fourth week. Five consecutive weeks of narrowing gains have cut the pace of increase to about one-third in little more than a month.
Downward pressure has grown more pronounced in the Gangnam area. Gangnam District fell 0.56% in a week, a steeper decline than the week before. Its weekly changes over the past six weeks were minus 0.11%, minus 0.41%, minus 0.35%, minus 0.36%, minus 0.42% and minus 0.56%. Seocho District dropped 0.33% and Songpa District fell 0.19%, leaving all three of Gangnam's districts weaker. An official at the Korea Real Estate Board said prices fell mainly at major complexes in Apgujeong and Daechi in Gangnam District, in Banpo and Jamwon in Seocho District, and in Bangi and Jamsil in Songpa District.
The correction is also showing up outside the Gangnam area. Apartment prices in Yongsan District swung to a 0.01% decline this week from a 0.02% gain the previous week. Yongsan's gains had narrowed over the past six weeks to 0.04%, 0.09%, 0.10%, 0.07% and 0.02% before turning negative this week.
Districts outside Gangnam, by contrast, are still propping up the citywide gain. Seodaemun District rose 0.41%, the largest increase in Seoul, followed by Dongdaemun and Seongbuk districts at 0.36% each, Nowon District at 0.34%, Gangbuk District at 0.31% and Geumcheon District at 0.25%. The board said transactions at higher prices continued mainly at large complexes, properties near subway stations and small- and mid-sized apartments.
Even so, momentum in those districts is weaker than before. By region, the northeastern area's gain eased to 0.28% this week from 0.33% the previous week, the northwestern area to 0.18% from 0.23% and the southwestern area to 0.16% from 0.20%. Individual districts also slowed, with Seodaemun easing to 0.41% from 0.44%, Dongdaemun to 0.36% from 0.39%, Seongbuk to 0.36% from 0.39%, Nowon to 0.34% from 0.37% and Gangbuk to 0.31% from 0.33%.
Market watchers said tighter lending rules combined with rising interest rates have increased the funding burden on buyers, weighing on the pace of price gains in Seoul. The impact of higher financing costs and smaller loan limits is relatively greater in the Gangnam area, where absolute prices are high, and transactions there have thinned while the scale of price corrections has widened.
