Real Estate Prices

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It has been two months since the government announced new policies to tame skyrocketing real estate prices. For the first time, apartment prices in Seoul fell, but it is still not enough compared to their sharp increase early this year. It remains to be seen if apartment prices in Seoul will continue to decline.

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This large apartment complex in southern Seoul is subject to re-building. A 106-square-meter unit in the complex cost around 3.8 billion won in early September, before the new real estate policies were announced. But last month, it fell 3.5 billion won. Fewer apartment transactions are taking place lately, as potential buyers hope that prices will continue to fall, while sellers refuse to lower the price.

[Soundbite] Park Sun-ae(Realtor) : "The gap in price expectations between buyers and sellers is too wide. In some cases, it's simply a decrease in nominal prices rather than actual transaction prices."

This week, apartment prices in the city of Seoul fell 0.01 percent. It's the first decrease since September last year. Apartment transactions are also on the decline. Analysts say the real estate market has suffered a blow due to a combination of factors, such as the economic recession, the possibility of interest rate spikes, and mortgage regulations since the new real estate policies took effect last September. Moreover, potential buyers still find apartment prices to be too expensive. Prices at this complex, which fell around 300 million won in just one month, had surged 1.2 billion won over the past 1 year. Apartment prices in Seoul have soared more than 7 percent this year. This week they fell 0.01 percent.

[Soundbite] Park Won-gap(Kookmin Bank) : "Apartment prices may fall further unless all the units that are up for sale now are sold off by the high-demand season, which falls on the winter school break period."

The government decided to disclose the prices of more apartment complexes built on public land starting next year, but it remains to be seen if such measures will help tame prices.