Home prices in Seoul’s posh districts fall after year-long rally

[SEOUL] Seoul apartment prices extended their gains for another week, though the year-long rally showed signs of cooling as values slipped in some of the capital’s wealthiest districts. 

Prices in the city firmed 0.09 per cent in the week ended March 2, rising for the 57th straight week, according to data released on Thursday (Mar 5) by the Korea Real Estate Board (KREB). That was slower than the previous week’s 0.11 per cent increase and marked the smallest rise since September. Nationwide, apartment prices climbed 0.04 per cent.

In some of Seoul’s most sought-after areas, prices declined. Gangnam-gu – known for its high-end shopping and K-pop celebrities – fell 0.07 per cent, while Yongsan-gu slipped 0.05 per cent. The pullback may offer some relief to policymakers concerned about financial stability risks stemming from the property boom. The pace of gains in Seoul has now slowed for five consecutive weeks.

Transactions at lower prices picked up in some complexes amid a rise in discounted listings, while reconstruction-driven projects and apartments with strong fundamentals continued to advance, the KREB said, describing a mixed market overall.

The uninterrupted rally has drawn criticism from President Lee Jae Myung, who has repeatedly warned speculators and multiple-home owners on social media. His administration has rolled out measures including tighter mortgage rules and the removal of preferential tax treatment on home sales to curb speculative demand.

The latest data followed the Bank of Korea’s decision to hold its benchmark rate at 2.5 per cent, with policymakers signalling no change over the next six months. While consumer sentiment towards home prices posted its sharpest drop since July 2022, governor Rhee Chang Yong said housing-related risks remain elevated and financial stability concerns are likely to persist. BLOOMBERG