Worst Real Estate Market Ever: Jeonse or Sales, Selling Offers Piling Up

The view of Seoul’s Gangnam area from the Seoul Sky Observatory at Lotte World Tower. /Yonhap News

The apartment housing supply-demand index in Seoul dropped to below 70 points. A series of interest rate hikes and falling housing prices resulted in a decreasing buying trend. Consequently, the supply-demand index seems to have fallen, too.
The supply-demand index for the nationwide apartment jeonse (lease on a lump-sum deposit) also dropped below 80 points. It is at a record low since the research on the index has begun.
According to the time series analysis of weekly apartment prices by the Korea Real Estate Board (KREB) on November 18, the apartment supply-demand index in Seoul was 69.2, down from the previous week’s (70.7 points). It has gone below the 70-point mark for the first time in 123 months: it is the record low since the index of the first week of August 2012.
If the index is lower than the reference point of 100, it indicates more sellers than buyers in the market.
The apartment supply-demand index in Seoul fell below 100 points in the third week of November 2021, recording 99.6 points. Since then, it has been a ‘buyer’s market’ for 53 consecutive weeks. The desired buying and selling prices do not match, and the potential buyers keep pulling out of the market.
According to the Seoul Real Estate Information Plaza, the number of reported apartment deals in October was 488 (based on the contrate date). Although the reporting period is not over yet, it is likely to be an all-time low for October’s business.
In other provinces, the same index this week also dropped from the previous week’s: from 74.1 to 72.8 points in Gyeonggi-do and from 73.9 to 72.1 points in Incheon. Accordingly, the supply-buy index of the metropolitan area dropped from 73.0 to 71.6. The nationwide apartment supply-demand index has been below the 80-point mark for two consecutive weeks at 76.9 points (down from the previous week’s 78.5 points).
The downward trend continues in the jeonse market as well. The nationwide apartment jeonse supply-demand index fell below the 80-point mark, from 80.4 to 78.4 points this week. Although the supply-demand index is relative, it may signify jeonse offers piling up in the market. In simple numerical terms, it is the lowest ever since the KREB started relevant research in July 2012. The apartment jeonse supply-demand index recorded 70.6 points.