'Su·Yong·Se' Steeper Than Seoul... Rose Together with Pinset and Balloon

[Asia Economy Reporter Kim Yuri] Although apartment sale prices have notably risen mainly in the outskirts of Seoul this year, some areas in Sejong and the metropolitan area recorded even larger increases than Seoul. While the government has been targeting the Gangnam area of Seoul and multi-homeowners with tailored measures, housing prices in the outskirts of the metropolitan area, Sejong, and Daejeon have soared.

According to the KB Real Estate Live On monthly housing price trend report on the 4th, the region with the highest apartment price increase rate this year was Sejong City. As of the 10th of last month, the increase rate reached 23.07%. This was followed by Yeongtong-gu in Suwon at 15.42%, Suji-gu in Yongin at 12.67%, Seo-gu in Daejeon at 11.90%, and Gwonseon-gu in Suwon also recorded a high increase rate of 11.49%.

The price increase rates in these areas are up to three times higher than the 6.96% increase rate of apartment prices in Seoul during the same period. Even within Seoul, the areas with notable price increases this year are all outside the Gangnam area. Nowon-gu rose the most at 11.40%, followed by Yangcheon-gu (10.10%), Guro-gu (9.30%), Seongbuk-gu (8.98%), Geumcheon-gu (8.91%), Gangbuk-gu (8.80%), and Gwangjin-gu (8.14%). This trend is distinctly different from last year when the Gangnam area led the price increases.

Industry experts cite the government's 'out-of-sync pinpoint regulations' as one of the reasons for the expanded price increases not only in Seoul's Gangnam area but also in the outskirts of Seoul, some parts of Gyeonggi Province, Sejong, and Daejeon. Since the second half of last year, a panic buying movement driven by the anxiety of 'if you don't buy now, you may never be able to' has been occurring mainly among non-homeowners. When the government introduced loan regulations such as the complete ban on mortgage loans for apartments over 1.5 billion KRW through the December 16 measures, housing purchase demand shifted toward properties priced below 900 million KRW.

This year, Yeongtong-gu in Suwon and Suji-gu in Yongin, which rank high in apartment price increases, have been called 'Su-Yong-Seong (Suwon, Yongin, Seongnam)' and have attracted buying demand since early this year. Although the government designated some areas as adjusted target areas in February to cool down the buying fever spreading in the metropolitan area, Yeongtong-gu in Suwon and Suji-gu in Yongin, which were already included in the adjusted target areas, continued their upward trend. Suwon and Suji-gu in Yongin were designated as speculative overheating districts during the June 17 measures, tightening regulations, but the upward trend has continued until recently.

The most prominent price increase area this year is Sejong. With abundant liquidity and supply shortages relative to demand, Sejong's housing prices had been rising, but surged sharply after Kim Tae-nyeon, the floor leader of the Democratic Party, mentioned relocating the administrative capital in July. Sejong City has had a low volume of new supply and move-ins this year, causing both sale and jeonse (long-term lease) prices to rise significantly. In August, the average apartment sale price per 3.3㎡ in Sejong was 15.88 million KRW, up 41.79% compared to the end of last year (11.20 million KRW). In some areas like Daepyeong-dong, new record-high prices have been reported, rising by 100 to 200 million KRW within a month.

Experts believe that although the government's demand-suppressing pinpoint real estate measures have slowed the rise in Seoul housing prices, it will be difficult for prices to drop significantly. Ham Young-jin, head of the Zigbang Big Data Lab, said, "While some adjustments are possible given the abundant liquidity in the market, it is hard to expect a downward trend."

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