South Korea's apartment sales market has been in the worst mood since 2006 , worried that it will trigger an economic slowdown

The number of apartment sales in the first half of this year hit the lowest level since 2006 due to sharp interest rate hikes, loan regulations and reduced tax benefits.

In addition, the auction winning rate of apartments in Seoul was the lowest in 13 years.

 

copyright by Yeonhap news

According to the Korea Real Estate Agency on the 31st, the number of apartment sales nationwide in the first half of this year was 184,134, the lowest in the same period since related statistics began in 2006.

A notable feature is that the proportion of apartment sales in Seoul under the age of 30 in the first half of this year was less than 35.9%.
The buying trend weakened due to concerns over high prices, interest rate hikes and falling housing prices, which sharply rose in apartment sales under 30 years old, which recorded 41.4% and 42.0% in the first and second half of last year, respectively. As a result, the so-called "panic buy" has also decreased significantly this year.

This is not just a matter for Seoul. The number of apartment sales by local governments across the country has been on the decline compared to last year.

In addition to the sales market, the apartment auction market, which is considered a leading indicator of the real estate market, has also fallen into a slump.

The winning bid rate for apartments in Seoul this month was 26.6%, the lowest in 13 years and 7 months since December 2008 (22.5%). As the winning bid rates of Gyeonggi (45.6%) and Incheon (31.3%) also hit new lows this year, the winning bid rate of all apartments in the Seoul metropolitan area fell to 38.1%.

The average number of bidders for auctions was also the lowest in Seoul (3.0 people) and Incheon (4.5 people) as of this year, as well as nationwide (5.8 people). The winning bid rate, which means the winning bid compared to the appraised price, also recorded 90.6% nationwide and 93.4% in the Seoul metropolitan area this month, the lowest in a year and 10 months and 2 years and 6 months, respectively.

As the real estate slump is likely to lead to an economic recession, economic experts are paying keen attention, and in response to the sharp rise in inflation, they are concerned that the possibility of unprecedented stagflation in the event of an economic recession cannot be ruled out.

Amid normal economic activities resuming after the COVID-19 crisis, ordinary Koreans are living in difficult times due to high prices, high oil prices, high interest rates, weak investment sentiment, and the economic downturn.