Apartment prices are now turning down after having remained unchanged for weeks, adding fuel to the debate over whether the housing market is at an increasing risk of oversupply.

The average weekly transaction price for apartments was down 0.01 percent across the country last week, according to data from the Korea Appraisal Board. It marked the first price decrease since the third week of June 2014.

Lower prices in Seoul led to the decline. In particular, house prices in some posh districts in southern Seoul dropped by 0.03 percent from a week earlier.

Kang Ho-in, the minister of land, infrastructure and transport, said last week it would be too early to see the latest fall in house prices as reflecting a trend. He said deteriorating economic conditions are further dampening would-be buyers’ sentiment in the winter season, when demand usually remains weak.

The measures announced in December to tighten lending rules have also made it more difficult to take out mortgage loans.

But many real estate experts have expressed concern that house prices may continue to show a downward trend.

“Above all, the uneasy sentiment itself can be the most worrisome for the property market,” said Chae Mi-ok, head of a real estate research institute affiliated with the KAB.

The first fall in house prices in 86 weeks has stoked debate over whether the housing market is at a risk of suffering from oversupply in the coming years, with economists and property experts evenly divided in their views on future market conditions.

The numbers of apartments permitted for construction or coming to the market last year amounted to record highs of about 765,000 and 525,000, respectively. The number of apartments unsold across the country nearly doubled over just two months to 61,512 in December.

In a report released late last year, Song In-ho, a researcher at the Korea Development Institute, said the housing market should be seen as oversupplied, raising the need to prepare against potential negative impacts. He noted the number of houses given construction permits in 2015 far exceeded the average annual demand for new homes estimated at about 350,000.

But some experts dismiss the argument that the fall in prices coupled with a rise in the number of unsold apartments suggests that the supply of houses has exceeded the level that can be absorbed by the market.

Suh Seung-hwan, former land minister who now teaches at Yonsei University in Seoul, said in a recent paper that it is more proper to gauge the amount of housing supply in terms of the number of homes completed not those given construction permits. He argued the number of apartments built last year, which was estimated at around 430,000, a slight increase from the previous year’s 412,345, was not far above the actual demand.

Roh Hee-soon, a researcher at the Korea Housing Institute, said housing demand was unlikely to drop sharply as rental prices were continuing to rise.

With views split over the market situation, commercial banks and public financial institutions are beginning to tighten measures to avoid being exposed to possible risks from an oversupply of houses.

Experts generally agree these measures are needed to preempt sharp impacts of oversupply on the market. At the same time, however, they caution against taking excessive steps to the extent of dampening the property market, which would further complicate the country’s unfavorable economic conditions.

Critics attribute the instability in the housing market to what they see as the government’s inconsistent and short-sighted policy that swings between measures to boost or curb property prices.

Former Finance Minister Choi Kyung-hwan, who stepped down in January, implemented a set of measures to shore up house prices as part of efforts to reinvigorate the sluggish economy after he took office in July 2014. Their positive effect came with the risk of further increasing household debt, resulting in prodding financial authorities to tighten rules on mortgage loans in December.

This flip-flop has hurt market stability and undermined public trust in government policy.

Critics now call on policymakers to put the focus of real estate policy on guaranteeing all citizens secure and stable housing conditions rather than being swayed by price fluctuations. This would enable them to push for consistent measures from a long-term view, they say.

By Kim Kyung-ho (khkim@heraldcorp.com)