Seoul’s apartment transaction price index rises in May for fifth month

The view of downtown Seoul from Namsan Mountain on July 16. [Photo by Yonhap]

Apartment transactions in Seoul, South Korea, have risen for five consecutive months in May, lending support to the belief that Seoul’s apartment prices have entered an upward trend after bottoming out following the quick sales of apartments at the beginning of the year.

According to data from the Korea Real Estate Board on Tuesday, the Seoul apartment transaction price index rose 1.43 percent month-on-month in May. This marks the fifth consecutive month of increase since a 1.04 percent rise in January. An increase in the transaction price index indicates a rise in transactions at higher prices compared to the previous sales.

However, the increase was slightly slower than the previous month’s 1.59 percent. By region, the northwest region, which includes Mapo, Seodaemun, and Eunpyeong districts, saw the largest increase of 2.46 percent among the five major regions. This is due to increased demand from the outskirts for apartment complexes close to downtown areas, such as Mapo district.

The southeast region, which includes Gangnam, Seocho, Songpa, and Gangdong districts, saw the second largest increase of 2.01 percent, followed by the southwest region, which includes Dongjak, Yeongdeungpo, and Yangcheon districts, with a 1.55 percent increase. Gyeonggi Province and Incheon also recorded their fourth consecutive month of growth since February, up 1.18 percent and 0.85 percent month-on-month, respectively.

As a result, the apartment transaction price in the Seoul metropolitan area rose by 1.22 percent, widening from the previous month’s 1.19 percent. The nationwide apartment transaction price index also rose 0.82 percent, continuing its upward trend for the fourth consecutive month. While the provinces increased by 0.40 percent, five metropolitan areas, including Busan (0.37 percent), Daegu (0.22 percent), and Ulsan (1.11 percent), all saw an increase in the transaction price index.

In Sejong, the transaction price index for May rose by 0.43 percent, maintaining its upward trend for the fourth consecutive month, but the increase was significantly lower than the previous month‘s 2.77 percent.

Unlike apartments, the transaction price index for townhouses and multi-unit houses declined from the previous month in Seoul (-0.31 percent), the Seoul metropolitan area (-0.69 percent), and nationwide (-0.38 percent). The decline is believed to be a result of a slowdown in transactions and purchases of multi-unit houses and townhouses, also known as “villas,” in the aftermath of the latest housing fraud.

With the recent increase in transactions, the apartment transaction price index is expected to continue to rise in June. The preliminary index for June, which is based on reported transactions until the previous month, is expected to rise by 1.32 percent in Seoul and 0.52 percent nationwide.

According to a real estate information provider in Seoul, as of Monday, the number of reported apartment transactions in Seoul reached 3,581 in June, surpassing 3,422 cases in May.