Seoul apartment prices rose for an 86th consecutive week, setting a record for the longest streak of gains, but the pace of increase slowed for a fifth straight week. Declines deepened in the three southern Gangnam districts, Yongsan-gu turned negative, and districts outside Gangnam that had propped up the city's prices are losing momentum. Analysts said that if weakness in Gangnam continues alongside smaller gains elsewhere, Seoul's price growth could turn negative around the end of the year.
Seoul apartment sale prices rose 0.09% from the previous week as of the 28th of last month, according to weekly apartment price data for the fourth week of September released by the Korea Real Estate Board on the 1st. That marked an 86th straight week of gains since the first week of February last year, the longest run on record. The previous record was 85 weeks, from the second week of June 2020 to the third week of January 2022 under the Moon Jae-in administration.
Even as the record fell, the upward trend is weakening rapidly. The weekly gain 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. Five consecutive weeks of slowing left the growth rate at about one-third of its level just over a month earlier.
Downward pressure was clearest in the Gangnam area. Prices in the southeastern zone, which includes the four Gangnam districts, fell 0.26% this week, a steeper drop than the 0.21% decline a week earlier. After rising 0.03% in the fourth week of August, the zone posted declines of 0.12%, 0.13%, 0.16%, 0.21% and 0.26%, widening for five straight weeks. Gangnam-gu fell 0.56% in a week, while Seocho-gu and Songpa-gu dropped 0.33% and 0.19%. Gangnam-gu in particular has weakened further over the past six weeks, with declines of 0.11%, 0.41%, 0.35%, 0.36%, 0.42% and 0.56%.
The correction was also detected outside Gangnam. Yongsan-gu swung to a 0.01% decline this week from a 0.02% gain the week before. Yongsan had been posting shrinking gains of 0.04%, 0.09%, 0.10%, 0.07% and 0.02% over the past six weeks before turning negative.
Outlying areas of Seoul and districts with many apartments priced below 1.5 billion won, by contrast, are still supporting the overall index. Seodaemun-gu rose 0.41%, Dongdaemun-gu and Seongbuk-gu each gained 0.36%, Nowon-gu 0.34%, Gangbuk-gu 0.31% and Geumcheon-gu 0.25%. Even in those areas, however, momentum is easing. Gains in the northeastern zone slowed to 0.28% from 0.33%, the northwestern zone to 0.18% from 0.23%, and the southwestern zone to 0.16% from 0.20%.
Analysts point to the Gangnam downturn and the staying power of non-Gangnam districts as the key variables that will determine where Seoul prices head. If Gangnam keeps falling and gains also shrink in mid- and low-priced areas such as the northeastern and northwestern zones, which have been holding up the citywide index, Seoul prices could flatten or enter a decline around the turn of the year, they said. Yoon Soo-min, senior real estate specialist at NH NongHyup Bank, said, "We expect Seoul home prices to turn lower by the end of this year at the earliest and early next year at the latest," adding, "If gains in the northeastern and northwestern zones shrink while Gangnam continues to fall, we cannot rule out the possibility that the citywide index turns negative." He said, "With prices having already risen sharply, the fact that loan curbs are reducing the funds that can flow in and that transaction volumes have also fallen is adding to downward pressure," and added, "In particular, in the market for homes priced at 1.5 billion won or less, trading could slow as buyers looking to trade up to better locations find that path blocked."
Rising funding costs are also cited as a factor that could sap gains outside Gangnam. Shin Bo-yeon, a professor of real estate AI at Sejong University, said, "Outlying districts are currently supporting Seoul's growth rate, but they too are affected by higher interest costs, aggregate lending caps and various loan restrictions." She added, "Banks sometimes raise their own spreads at the end of the year, so funding conditions could worsen further," and projected, "If this trend continues, the growth rate for Seoul apartment prices could fall to around 0.01% by year-end." She said, however, that a shortage of new homes ready for occupancy and limited supply of jeonse (a lump-sum deposit lease) and monthly-rent homes could again push prices up next year.
Others expect Seoul prices to hold at firm or slightly higher levels through the end of the year. Nam Hyuk-woo, a researcher at Woori Bank, said, "Since price strength in mid- and lower-tier districts has not weakened much, gains could continue at a firm or better pace through year-end," and added, "After that, interest rate levels and whether tax code revisions are eased will determine where prices go."
