Seoul land prices fall for the first time in ten years and six months due to housing slump

As the construction industry enters a slump, nationwide land prices grew by the smallest rate for the first time in twelve years and six months based on half-yearly figures. Land prices in Seoul fell for the first time in ten years and six months.

The price of land in Seoul dropped for the first time in ten years and six months in the first half of this year as the recession in the real estate market continues. Land prices nationwide rose by less than 0.1%, the smallest half-yearly increase in twelve years and six months.

According to the “Land Price Fluctuation Rate and Land Transaction Volume in the First Half of the Year” released by the Ministry of Land, Infrastructure and Transport on July 25, in the first half of 2023, land prices rose by 0.06% nationwide. This was 1.83% lower than the 1.89% recorded during the same period last year. It was 0.76% lower than the figure from the second half of 2022 (0.82%). The latest increase rate, which show that prices have remained steady, was the lowest in twelve years and six months since the second half of 2010 when prices rose 0.059%.

A regional analysis showed that land prices dropped the most in Jeju (0.45 → 0.35%), among the nation’s metropolitan cities and provinces. Jeju was followed by Ulsan (0.49% → -0.16%), Daegu (0.82% → -0.12%) and Jeollabuk-do (0.86% → -0.08%).

The price of land in Seoul also dropped 0.01%, the first drop based on half-yearly figures in ten years and six months (since the second half of 2012, when prices rose by -0.05%). Among the 250 si (city), gun (county) and gu (district) nationwide, prices grew by a rate smaller than the national average in 152 cities, counties, and districts, including Seongbuk-gu (-0.64%), Seodaemun-gu (-0.61%), Dobong-gu (-0.56%), Dongdaemun-gu (-0.55%), and Gangseo-gu (-0.54%) in Seoul.

However, monthly figures showed that land prices have been rising for the fourth consecutive month since March.

The volume of land transactions continued to fall. The total volume of land transactions including land attached to buildings was 924,000 lots (717.8km2), down 1.5% from the second half of last year. Compared with the first half of 2022, the volume dropped by 27.3%.

As land sales decreased, permits for land development also decreased by over 10%. According to the statistics on the status of urban planning in 2022 released by the land ministry, last year, the government issued 243,605 permits for development, down 11.5% from the previous year. Development permits were introduced to have local government chiefs authorize development in order to prevent excessive development. The number of permits issued has been steadily declining since 2019 due to Covid and the real estate market recession.