Two Months After the June 17 Measures, Seoul Housing Prices Hit Record Highs Repeatedly

[Asia Economy Reporter Yoo In-ho] Two months have passed since the June 17 measures were introduced to block 'gap investment' by multi-homeowners and corporations, but the upward trend in apartment prices in Seoul remains unchanged.

Despite successive real estate policy announcements on July 10 and August 4 following June 17, there is an analysis that a panic buying phenomenon?'buy before it's too late'?and a trend of investing in a single, solid property in Seoul rather than the outskirts are becoming more pronounced.

According to statistics from the Korea Real Estate Board on the 18th, apartment prices in Seoul rose by 0.50% over the recent two months (June 15 to August 10) after the June 17 measures. Apartment prices had fallen by 0.06% before the June 17 measures this year but turned to an upward trend during the two months following the measures.

As the upward trend continues, the average apartment sale price in Seoul surpassed 1 billion KRW for the first time at the end of last month. The average sale price, which had remained in the early 500 million KRW range in May 2013, has doubled in seven years.

Gangbuk-gu (0.63%) saw the highest increase, followed by Dobong-gu and Mapo-gu (0.61%), Nowon-gu (0.60%), and Guro-gu (0.57%) showing notable rises. Gangseo-gu and Dongdaemun-gu (0.56%), Gwanak-gu and Songpa-gu (0.55%), Yangcheon-gu (0.52%), and Yeongdeungpo-gu (0.51%) also rose above the average.

Due to increased loan regulations and tax burdens on high-priced homes, the price rise appears to have been led by the outskirts of Seoul, where apartments priced below 900 million KRW are concentrated. Additionally, with most of the metropolitan area designated as regulated zones, abundant market liquidity has turned its attention back to Seoul.

In fact, Gyeonggi Province recorded a 5.53% increase in apartment prices just before the June 17 measures, but the rise slowed to 1.82% over the two months following the measures.

While the metropolitan area is slowing down, record-high prices are emerging not only in Seoul's Gangnam area but also in the Gangbuk area. On July 21, a 112㎡ apartment in Acro River Park, Banpo-dong, Seocho-gu, was traded at 4.3 billion KRW, setting a new record. This is close to 100 million KRW per 3.3㎡.

Record prices were also reported in Cheongdam and Samseong-dong in Gangnam-gu and Jamsil-dong in Songpa-gu, which are designated as land transaction permission zones. In Cheongdam-dong, four record prices were recorded, including Cheongdam Hyundai 3rd Complex 60㎡ (1.59 billion KRW) and Cheongdam 4th I-Pyeonhansesang 85㎡ (1.83 billion KRW).

In Samseong-dong, two record prices were reported, including Ssangyong Platinum 157㎡, which was traded at 2.1 billion KRW, 120 million KRW higher than the previous high. In Jamsil-dong, three record price transactions occurred, including Jamsil Lake Palace 85㎡ (2.05 billion KRW).

The same applies to non-Gangnam areas. On August 6, a 101㎡ apartment in Mok-dong New Town 7 Complex, Yangcheon-gu, set a new record at 2.2 billion KRW. On August 8, Cheonggu 3rd Complex 84㎡ in Junggye-dong, Nowon-gu, changed hands at 1.109 billion KRW, surpassing the 1.1 billion KRW mark. On August 11, a 60㎡ apartment in Daesang Town Hyundai, Banghak-dong, Dobong-gu, was traded at a record 650 million KRW.

Experts analyze that due to the government's continuous real estate regulations and the Rent 3 Act causing a sharp rise in jeonse (long-term deposit lease) prices, real demand buyers are moving with the mindset of 'buy before it's too late,' causing housing prices to rise centered on Seoul. Ko Jong-wan, director of the Korea Asset Management Research Institute, pointed out, "As a balloon effect caused by government regulations, the trend of investing in a single solid property is becoming more prominent again," adding, "It can be said that the real estate policy is flawed."

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