HOUSING PRICES FALL IN THE CAPITAL REGION

[Anchor Lead]

The Bank of Korea has raised the key interest rate for the fourth consecutive month. Higher interest rates are causing a plunge in apartment prices. Housing prices in the capital region fell 0.18 percent this week, recording the largest decline in ten years.

[Pkg]

An apartment complex in Gangbuk-gu District, Seoul. An 84-square-meter unit that used to cost 1.18 billion won in April was sold for 900 million last month. It's a dip of nearly 300 million won in just three months.

[Soundbite] Kim Sung-myung(Realtor) : "No one wants to buy apartments now. They can only be sold at large discounts."

Apartment prices in Seoul have been declining for 13 straight weeks. This week they plummeted 0.11 percent. The downward trend is particularly noteworthy in the Gangbuk region, where there are many low- to medium-price apartments. Property prices in the overall capital region were down 0.18 percent. The decline is becoming steeper by the week. The latest dip is the largest in almost a decade. The primary reason lies in rising interest rates on housing loans following continuous key interest hikes. In just a week, the decrease in apartment prices in Goyang and Seongnam, home to the first urban development project, has doubled. Controversy over the postponement of apartment rebuilding there also contributed to the decline.

[Soundbite] (Realtor in Goyang) : "We received a lot of inquiries in April and May, when expectations of rebuilding were high. But now we get very few inquiries from potential investors. Only units offered at discounted prices are sold."

With few people willing to buy homes these days, only properties offered at large discounts are being sold. Pundits say the trend would be difficult to reverse.

[Soundbite] Yoon Ji-hae(Researcher, Real Estate R144) : "Potential buyers hope apartment prices would fall further. Homeowners who need to sell their properties quickly are eager to sell them before prices dip further. That’s why the actual transaction prices become lower and lower."

Of all apartment units sold nationwide and in Seoul in Q3, about 50 percent were sold at lower prices, the largest percentage in a decade.