Property transactions across South Korea fell for a fifth straight month in August, dropping to their lowest level since January last year. A roughly 40% plunge in both the number and value of Seoul apartment deals led the nationwide slowdown.
Nationwide property transactions totaled 72,976 in August, down 14.3% from 85,163 in July, according to an analysis of Ministry of Land, Infrastructure and Transport actual transaction price data released by Real Estate Planet on the 13th. That was the lowest monthly figure in 19 months, since January last year, when 63,857 deals were recorded. The combined value of those transactions fell 23.1% to 28.85 trillion won ($20.1 billion) from 37.52 trillion won a month earlier. While the value declined for a second consecutive month, it was still 3.1% higher than the 27.98 trillion won recorded in August last year.
The slowdown was most pronounced in the apartment market. Nationwide apartment transactions fell 20.0% to 33,546 in August from 41,914 in July. Their combined value dropped 28.3% to 16.00 trillion won from 22.33 trillion won. The decline was steepest in Seoul, where apartment transactions fell 39.7% to 3,529 in August from 5,855 in July, the sharpest drop of any region. The value of those deals shrank 40.5% to 3.97 trillion won from 6.68 trillion won. In Gyeonggi Province, apartment transactions fell 22.5% to 10,959, with their value down 28.8% to 6.12 trillion won.
Other property types were broadly weak as well. Transactions of officetels — studio units used as either a home or an office — fell 13.4% from the previous month to 2,905, with their value down 28.0% to 683.5 billion won. Deals involving low-rise multi-unit housing dropped 12.9%, while those for detached and multi-household homes fell 10.1%. Transactions of collective buildings such as factories and warehouses declined 21.8%, a steeper drop than apartments. Retail and office space was the only one of the nine property types surveyed to post an increase, with transactions rising 23.5% to 3,139 in August from 2,541 in July. Such deals climbed 70.2% in Seoul and 121.2% in Busan.
"With the burden of interest rates, lending restrictions and tax changes, demand could diverge going forward depending on location and property type," said Jung Soo-min, chief executive of Real Estate Planet.