Seoul Knowledge Industry Center Prices Plummet, 4.9% Drop in Q4

The Seoul Knowledge Industry Center (Jisan) market, despite expectations of interest rate cuts, is struggling to ignite a spark of recovery and is falling into a deep swamp of recession. The latest report from commercial real estate data company R.SQUARE clearly revealed this harsh reality. According to R.SQUARE's 'Q4 2024 Jisan Sales Index (ROSI)', the Seoul Jisan sales index recorded 191.1 points, showing a shocking decline. This is a sharp drop of 4.9% compared to the previous quarter and a staggering 11.9% compared to the same period last year. In particular, when compared to its peak in Q3 2022, prices have plummeted by a remarkable 25%, clearly demonstrating the market's instability. Prices briefly stagnated from late 2023 to the first half of 2024 due to expectations of market recovery, but analysis shows that they ultimately could not avoid further declines. Meanwhile, trading volume paradoxically showed an increase. Q4 transaction value recorded 174.8 billion KRW, an increase of 28.7% compared to the previous quarter, and the cumulative transaction value for Seoul Jisan in 2024 also increased to 458.3 billion KRW, up 29.8% year-on-year. However, R.SQUARE Research Center drew the line, stating that it is difficult to interpret this as a positive sign of market recovery. Since most of these transactions occurred amidst a significant price drop, it is judged that this is not a genuine market recovery, but rather some investment made by those targeting opportunities to buy at a low point. Ryu Kang-min, head of R.SQUARE Research Center, pointed to the 'absence of robust rental demand', unlike the office market, as a fundamental problem for the Seoul Jisan market. Due to these structural limitations, he put forth a pessimistic outlook, stating that even if interest rate cuts materialize, it will not be easy for Jisan prices to turn to an upward trend. The diagnosis is that the Jisan market is likely to experience continued price adjustments and weakness rather than recovery for the time being.