Apartment prices in Seoul are set for fast cooling and downturn this year after rising last year by the steepest pace in 12 years.
Seoul apartment prices jumped 8.22 percent year-over-year in 2018, the largest gain since 2006 when they surged 23.5 percent, according to the Korea Appraisal Board on Wednesday.
Overall house prices in the capital rose 6.22 percent, up from 3.64 percent the previous year and by the largest margin in a decade.
In September, the government delivered multiple measures including a tax hike and loan regulations to tame the runaway housing prices.
Apartment prices in Seoul started to ease and finally slipped 0.01 percent in December, marking their first monthly decline in more than a year. Prices are sliding further as transactions have come to a grinding halt in previously red-hot locations.
In contrast, housing prices in the rural regions fell 0.86 percent last year. Apartment prices dipped 3.09 percent, retreating for the third straight year. This regional disparity softened the house price gains in the entire country from 1.48 percent in 2017 to 1.10 percent last year.
Experts forecast the correction in Seoul’s property prices to continue throughout this year amid the dimmer economic outlook and an anticipated uptick in interest rates.
Domestic housing prices fell 0.01 percent on month in December, sliding for the first time since last July. Price gains were narrowed or the falls widened in almost all regions, including the five metropolitan cities, Sejong administrative city and Jeju Island.
The fall in house prices has also spilled over to the jeonse market, a real estate leasing term unique to South Korea that involves the tenant paying a lump-sum deposit rather than a monthly rent. Jeonse prices in the country fell 0.19 percent on month in December while prices in Seoul were down 0.13 percent, facing a decline in just six months.
By Lee Ji-yong and Kim Hyo-jin
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