Korea’s housing market shows signs of recovery amid supply decline

Ricenz apartment complex in Jamsil, southern Seoul [Photo by Yonhap]

The South Korean housing market is showing signs of recovery amid a growing consensus that it has reached the bottom of its cycle.

According to a survey of eight industry experts conducted by Maeil Business Newspaper on Tuesday, a majority of the respondents said the real estate prices have bottomed out.

“The prices seemed to have come at the lowest level as deal prices have risen,” said Ham Young-jin, a director at Korea’s app-based home-finding platform Zigbang Co. “An additional decline in the prices seems unlikely given that new apartments for sale in Seoul remain limited.”

Housing prices have been trending upward across Gangnam in southern Seoul, a prime district known for its expensive real estate, in the wake of eased regulations.

The price of an 84-square-meter apartment at LLL’s and Ricenz in Jamsil, southern Seoul, has climbed recently to as high as 2.2 billion won ($1.7 million) from 1.8~1.9 billion won in February.

A 76-square-meter apartment at Eunma Apartment Complex in Daechi-dong, southern Seoul, was sold for 2.15 billion won earlier this month, up 300 million won from 1.8 billion won earlier this year.

“As the prices rise, some are weighing the timing of buying houses,” said a real estate agent in the area.

A decline in the number of unsold apartments across the country also shows that the housing market is on its way for recovery.

According to data from the Ministry of Land, Infrastructure, and Transport, there were 71,365 unsold apartments in Korea in April, slightly down from 72,104 units in the previous month. The figure reached an all-time high in February with 75,438 units before falling in March for the first time in 11 months.

Indicators of housing subscriptions to buy new homes have also shown improvement. Industry data shows that many of the new apartments, such as those in Seo District in Incheon and Hwaseong, Gyeonggi Province, have sold out recently.