The Jeju house price index has recently showed a drop in price for the first time since the index was introduced in 2005.
The drop is the biggest in the nation.
Joseph Kim reports.

This is an office in Jeju City which is the base for five real estate agencies.
To save on rent, they share the office.

[slug] Stagnated real estate business

As local real estate business has been stagnated, the office is quiet.

INTERVIEW
Yun Chang-jun / Real estate agent
Buyers and sellers of properties used to frequently visit my office. But over the last 2 years, the number of visitors has plunged. It's quiet on weekdays and holidays. Only a few apartment seekers come. Many real estate agencies have closed their businesses.
<인터뷰 : 윤창준 / 제주OOO공인중개사 대표>
"불과 1~2년 전까지만 하더라도 매도나 매수 의뢰를 하러 방문하는 고객들이 상당히 많았습니다. 그런데 지금은 평상시에도 거의 일요일 같은 수준으로 어쩌다 원룸, 투룸 정도 찾는... (중개업자들이) 많이 힘들죠. 그래서 폐업도 많이 하고... "

[slug] Home price fall for the first time since 2005, -1.6%

According to the data released by the Ministry of Land, Infrastructure, and Transport, the home price index has decreased by 1.6 percent in Jeju.
That's the first decrease in 15 years since the index was introduced in 2005.


Meanwhile, the national average increased 4.5 percent and Seoul recorded the highest increase at 6.8 percent, compared to the previous year.
The index dropped in three cities or provinces of (경남) Gyeongnam, (울산) Ulsan and Jeju. Jeju recorded the biggest drop.

2020 Home Price Index (Unit: %)
Seoul 6.8
Busan 4.3
Daegu 5.8
Incheon 4.4
Gwangju 5.9
Daejeon 4.4
Ulsan 0.2
Sejong 4.7
Gyeonggi 4.5
Gangwon 2.8
Chungbuk 1.7
Chungnam 0.8
Jeonbuk 2.6
Jeonnam 4.0
Gyeongbuk 2.1
Gyeongnam 0.4
Jeju 1.6



The home price index had risen steeply for years in Jeju.



In 2016, the growth rate of the index was four times the national average.
In 2018, it was twice the national average.
The growth rate started to come down from last year.
And this year, the rate has dropped to -1.5 percent in Jeju City and -1.66 percent in Seogwipo CIty.


Home Price Index (Unit: %)
2016 2017 2018 2019 2020
National average 4.15 4.75 5.51 9.13 4.50
Jeju City 16.21 17.86 12.08 6.67 -1.5
Seogwipo City 16.98 18.35 13.28 6.95 -1.66


Experts say that stagnation in the real estate business and construction businesses and a decrease in demand for housing from the slowed population inflow are contributing to the falling home prices.

INTERVIEW
Ko Chang-deok / Jeju office, Korea Association of Realtors
The number of real estate transactions has decreased from a slowed population inflow. More than 1,100 housing units have been empty for years.
<인터뷰 : 고창덕 / 한국공인중개사협회 제주지부장>
"호황 상태에 있던 제주도 주택거래가 제주도 인구 유입 증가율이 감소되고 이에 따라 미분양이 1천100 호 이상 계속 유지되고 있는 것이 문제고... "

The home price index will be finalized on January 23rd following deliberation by the National Property Price Publication Committee.

[Reporter] Joseph Kim
[Camera] Hyeon Gwang-hoon
[CG] So Gi-hun

If the index is fixed as it is now, the index is expected to impact actual transaction prices of local housing.

Joseph Kim, KCTV