When Low-Priced Apartments Drop by 2.5 Million Won, High-Priced Apartments Rise by Over 100 Million Won

[Asia Economy Reporter Moon Jiwon] Despite the government's real estate measures, the polarization of housing prices is worsening. Over the past year, the price of low-priced apartments nationwide has dropped by about 2.5 million KRW, while high-priced apartment prices have risen by more than 100 million KRW. The price gap between high-end and low-end apartments has widened to its largest extent in 10 years, accelerating residential polarization.

According to the monthly housing price trend time series data from KB Kookmin Bank on the 15th, the nationwide apartment average price quintile ratio this month was 7.36. This is the highest figure in 9 years and 9 months since August 2010 (7.40).

The quintile ratio is the value obtained by dividing the average price of the top 20% of apartments (5th quintile price) by the average price of the bottom 20% (1st quintile price). A higher ratio indicates more severe residential polarization.

This month, the average price of the top 20% of apartments nationwide was 798.86 million KRW, up 105.2 million KRW over the past year. However, during the same period, the average price of the bottom 20% was 108.6 million KRW, which actually fell by 2.47 million KRW. While high-priced apartment prices surged by 15.2%, low-priced apartment prices dropped by 2.2%.

This trend was led by apartments in the Seoul metropolitan area, including Seoul, Gyeonggi, and Incheon. The apartment price quintile ratio in Seoul was 4.53, showing a slight increase compared to 4.47 a year ago.

The average price of the bottom 20% apartments in Seoul was 397.76 million KRW, up 12.4% from a year ago. As a result, even the 1st quintile price in Seoul approached 400 million KRW, making apartments priced below 400 million KRW increasingly rare. The average price of the top 20% apartments in Seoul reached 1.8032 billion KRW, rising by 167.13 million KRW, or 10.2%, over the past year.

In Gyeonggi Province, the 1st quintile price fell by 0.7% to 156.6 million KRW over the past year, while the 5th quintile price rose by 15.3% to 679.64 million KRW. In Incheon, the 1st quintile price remained at the same level as a year ago, while the 5th quintile price increased by 17.4%.

Park Wongap, Senior Specialist at KB Kookmin Bank, stated, "Recently, high-priced apartment prices have risen sharply, especially in popular areas of Gangnam in Seoul and the metropolitan area, intensifying residential polarization. The preference for a 'smart single home,' mainly new apartments, also seems to have influenced the rise in high-priced apartment prices."

(Photo by Yonhap News)

However, in Seoul, the recent trend of price alignment has continued, leading to rising prices of mid-to-low-priced apartments in the outskirts. According to KB Kookmin Bank statistics, while the average price per 3.3㎡ of apartments in the three Gangnam districts?Gangnam, Seocho, and Songpa?increased by just about 2% this year, the 'Nowon, Dobong, Gangbuk districts (No, Do, Gang)' and 'Geumcheon, Gwanak, Guro districts (Geum, Gwan, Gu)' surged by 6-7%.

The average apartment sale price per 3.3㎡ in the three Gangnam districts rose from 54.91 million KRW in December last year to 56.02 million KRW last month, an increase of about 2.01%. This is a noticeable slowdown compared to the 8.5% rise in the previous five months from July to December last year.

However, during the same period, the average price per 3.3㎡ of apartments in No, Do, Gang rose from 20.84 million KRW to 22.27 million KRW, up 6.86%, and in Geum, Gwan, Gu from 22.32 million KRW to 23.92 million KRW, up 7.16%. These figures far exceed the average Seoul increase rate of 4.86% during this period.

Compared to the previous five-month average increase rates of 3.61% and 6.7% for No, Do, Gang and Geum, Gwan, Gu respectively, this year's price rise trend is steepening.

This content was produced with the assistance of AI translation services.