Apartment prices in Seoul dip 0.46% in August

The average price of apartments in Seoul fell 0.46 percent in August from July, data showed Tuesday, in the latest sign of a prolonged property market slump in Korea.

It marked the 18th straight monthly drop since March 2011, when the average price for one square meter stood at 17.94 million won ($15,870), according to data compiled by Real Estate 114, a real estate information provider affiliated with South Korea's Mirae Asset Financial Group Co.

The average price for one square meter in Seoul was priced at 16.9 million won in August, down from 16.97 million in July, said Yoon Ji-hae, a senior research fellow of the Real Estate 114.

A typical house for South Koreans is an 82-square-meter or 109-square-meter apartment.

Seoul's affluent Gangnam district saw the price of apartments fall 0.93 percent in August from July amid a deepening decline of prices of old apartments that could be torn down for reconstruction, said Yoon.

Yoon said heat waves, the summer rainy season and an economic slowdown stemming from the financial crisis in the eurozone have been blamed for the decline in apartment prices.

Meanwhile, prices of long-term deposits on leased homes in Seoul, known as jeonse, jumped 0.1 percent in August from July, the first increase in four months, according to Yoon.

Jeonse refers to a unique home rental system in South Korea under which a tenant pays a large lump-sum deposit to lease a home, usually for two years, in lieu of paying monthly rent. Landlords are restricted from raising the deposit during a lease, but there are no limits on a hike after the contract expires.

Drapt, a real estate information provider, said the average jeonse prices jumped 28.23 percent in Seoul since conservative President Lee Myung-bak took office in February 2008.

The increase was mainly attributed to a slump in the housing market and the construction of apartments by state land and housing developer LH Corp. for working people.

The figure is higher than the 15.85 percent increase recorded in the Seoul metropolitan area during the previous liberal government that ruled from 2003 to 2007. (Yonhap)