“The Daegu real estate market is in an environment where prices will continue to decline for the time being. It will be the same next year, but it seems that this atmosphere may soften a little at the end of the year.”
House prices in Daegu are falling helplessly. According to the Korea Real Estate Agency, as of the first week of August (1st), house prices in Daegu fell 0.13%. It was the 38th straight week of decline. In this year, Daegu as a whole fell 3.99%, and Dalseo-gu (-6.2%) and Jung-gu (-5.13%) saw the biggest declines. The same goes for pre-set prices. Jeonse prices fell 4.79% this year, and Jung-gu plunged by up to 11.9%.
The cause is a ‘supply bomb’. In Daegu, the supply of 13,660 households in 2020 has already started to exceed the reasonable demand of 11,870 households. Following this, the supply or expected to significantly exceed the appropriate demand, such as △16,904 households in 2021, 19,812 households in 2022, 34,419 households in 2023, and 2804 households in 2024.
“The biggest cause is supply,” said CEO Park. “Since the supply in the region is constantly pouring in, the Jeonse price is primarily weak, and the weak Jeonse price is leading the decline in the market price.” He continued, “Under this situation, the price of newly sold apartments is around 600 million to 700 million won, so the market is slow to absorb them and the sale is accumulating.”
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Permeation zones were lifted and regulations were lifted… “The market will not change.”
In June, the government lowered the regulatory rating of Suseong-gu, Daegu from the overheated speculation district to the adjustment target area, and lifted the adjustment target area for the remaining seven areas. Nevertheless, the atmosphere is not easily reversed. Just one month after the Daegu market was lifted from the regulated area, four districts (middle, east, south, and Dalseo-gu), half of the eight districts and counties in Daegu, were designated as unsold management areas. This is because unsold unsold units have not been resolved even after the restrictions are lifted.
As of the end of June, the number of unsold apartments in Daegu stood at 6718, the most in the nation. Of the 27,910 unsold housing units nationwide, 24% of them are concentrated in Daegu. The five areas with the largest number of unsold homes in Daegu are △Dalseo-gu (2346 households) △Dong-gu (1384 households) △Jung-gu (1022 households) △Suseong-gu (844 households) △Nam-gu (720 households). However, as Suseong-gu is an area subject to adjustment, designation of the unsold management area was avoided.
CEO Park Ji-min said, “Dalseo-gu and Dong-gu, Daegu, were areas that had to be reorganized in Daegu because there were many old houses.” However, it coincided with the real estate downturn, leading to a sharp drop in prices.”
He continued, “Most of the Daegu market has been lifted from the regulated area and designated as an unsold housing management area, but it is difficult to expect a reversal of the atmosphere. “It is difficult to create an environment that can revive the buying trend as external pressures such as concerns about a decline are too strong.”