Seoul 'Sale, Jeonse, Monthly Rent' Rise Together... Average Sale Price Surpasses 700 Million Won

Korea Appraisal Board November Nationwide Housing Price Trend Survey
Housing Price Instability Worsens Despite Government Assurances
Seoul Average Housing Sale Price Exceeds 700 Million Won for the First Time
Monthly Rent Increase Sharpens... Largest Since 2015

[Asia Economy Reporter Moon Jae-won] Last month, the prices for housing sales, jeonse (long-term lease), and monthly rent in Seoul all saw an increased rate of rise compared to the previous month. Notably, the average housing sale price in Seoul surpassed 700 million KRW for the first time last month. The government's successive real estate measures seem to be exacerbating the pain of tenants rather than stabilizing the housing market.

According to the nationwide housing price trend survey for November released by the Korea Real Estate Board on the 1st, the housing sale price in Seoul rose by 0.17% compared to the previous month. This increase is larger than the 0.16% rise recorded the month before.

After a sharp 0.71% surge in July, housing sale prices dropped to a 0.16% increase in October due to government measures, but the upward trend steepened again within a month. This market trend is completely different from the government's assurance that housing prices would stabilize following the 8.4 supply plan, including early supply of the 3rd new towns.

Looking at housing types, apartments rose from 0.11% to 0.12%, and multi-family houses increased from 0.15% to 0.18%, both showing expanded growth rates. It is also notable that the price increase for detached houses, which have relatively lower demand, is steeper. Although the growth rate slightly decreased from 0.38% in October to 0.37% last month, it still records a price increase 2 to 3 times higher than apartments and multi-family houses. The Korea Real Estate Board analyzed that "due to a decrease in new supply and instability in jeonse supply and demand, prices rose mainly for mid-to-low price and small-sized units."

As the price increase continues, the average housing sale price in Seoul last month was recorded at 710.83 million KRW, surpassing 700 million KRW for the first time. Considering that the average house price exceeded 600 million KRW in January last year, the average price has risen by 100 million KRW in just two years. The median price, which represents the middle value when housing sale prices are arranged in order, also soared to 660.95 million KRW, more than 200 million KRW higher than May 2017 (439.31 million KRW), when the current administration began.

The problem is that not only sale prices but also jeonse and monthly rent prices are rising simultaneously, creating a "triple rise" trend. Jeonse prices in Seoul increased by 0.53% last month, expanding from 0.35% in the previous month. The metropolitan area rose from 0.56% to 0.74%, and other provinces increased from 0.39% to 0.58%, indicating that jeonse instability is spreading nationwide.

In Seoul, jeonse price increases were particularly noticeable in the Gangnam area, including Seocho (1.13%), Gangnam (1.08%), and Songpa (0.98%) districts, while mid-to-low price complexes in outer Seoul areas such as Nowon (0.54%) and Dobong (0.36%) districts also showed significant increases.

This survey covers samples from October 13 to last month 9, so the effects of the government's November 19 jeonse measures were not reflected. However, recent weekly surveys show minimal effects of the measures, and combined with the phenomenon of listings being withheld and a shortage of new housing supply, many analyses predict that jeonse market instability will continue for the time being.

Monthly rent prices are also soaring. Seoul's monthly rent prices rose by 0.18% last month, the highest increase since related statistics began in July 2015. Compared to the previous month's increase of 0.11%, this is 0.07 percentage points higher. Additionally, most regions nationwide, including the metropolitan area (0.15%→0.18%), provinces (0.10%→0.17%), five major metropolitan cities (0.13%→0.23%), eight provinces (0.06%→0.11%), and Sejong (1.27%→1.42%), also saw steep rises in monthly rent prices.

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