National Apartment Price Increase Rate Hits New Record High Again... Seoul Also Sees Expanded Rise

Government Real Estate Measures Seem Exhausted... Housing Prices Surge
Nationwide Apartment Price Increase Rate 0.29%... Highest Ever
Seoul Also Recovers Buying Demand from 0.03% to 0.04%

A real estate agency in Songpa-gu, Seoul (Photo by Yonhap News)

[Asia Economy Reporter Moon Jiwon] The nationwide apartment price increase rate has broken the all-time high record again this week, following last week. The rise in apartment prices in Seoul also expanded further this week. It is analyzed that the strong government regulations that have been imposed so far have virtually lost their effectiveness.

According to the weekly apartment price trend for the second week of December announced by the Korea Real Estate Board on the 17th, as of the 14th, nationwide apartment prices rose by 0.29%, an increase from last week's 0.27%. After recording the highest rate in 8 years and 7 months since May 2012 at 0.27% last week, it broke the record again within a week.

Apartment prices in Seoul also rose by 0.04%, up from 0.03% the previous week. Seoul's increase rate had dropped to 0.01% due to government regulations after rising 0.11% as of July 6, but it has been gradually increasing since last month. This is interpreted as a result of tenants' buying demand expanding due to the spread of the jeonse (long-term lease) shortage caused by low interest rates and the new lease law.

Additionally, as Gyeonggi-do and major local areas were designated as regulated areas, real estate investment funds that lost their place to go gathered again in Seoul, which also pushed up apartment prices in Seoul.

The Korea Real Estate Board explained, "With the expansion of low-interest liquidity, a decrease in housing supply, and instability in jeonse supply and demand, buying demand slightly increased. The rise was mainly seen in major complexes in the Gangnam 4 districts and areas with expectations for redevelopment projects, as well as relatively mid-to-low priced complexes."

In fact, the rise in the Gangnam area of Seoul was distinct. Songpa-gu (0.08%) saw a significant increase compared to the previous week (0.04%), and Seocho-gu and Gangdong-gu also saw their rise rates increase from 0.03% last week to 0.06% this week. Gangnam-gu (0.05%) is also continuing its upward trend. Although the Gangnam area’s housing prices had stalled recently due to strengthened property taxes on high-priced homes, buying demand has recently recovered.

Besides Seoul, apartment prices in the metropolitan area, local regions, and the five major metropolitan cities also increased their rise rates, indicating nationwide housing price instability.

The apartment price increase rate in Gyeonggi-do expanded from 0.27% to 0.30%. After Gimpo-si was designated as a regulated area at the end of last month, the balloon effect grew in Paju-si (1.11%), where housing prices rose mainly around the Unjeong New Town area. Similarly, Goyang-si (0.88%), which also experienced a strong balloon effect, continued its upward trend centered on Ilsan-seo (0.99%), Deogyang (0.84%), and Ilsan-dong-gu (0.75%).

Ulsan (0.79%), where buying demand has surged after some areas of Busan were designated as regulated areas, saw a large increase in apartment prices in Nam-gu (1.13%). In Busan (0.71%), prices rose mainly in Gangseo-gu (1.36%), which avoided regulations, as well as in Gijang-gun (1.22%) and Busanjin-gu (1.12%).

[Image source=Yonhap News]

The jeonse market remains unstable. Nationwide apartment jeonse prices rose by 0.30%, increasing from 0.29% the previous week. The metropolitan area (0.24%→0.24%) and Seoul (0.14%→0.14%) maintained their rise rates, but the increase expanded in local areas (0.34%→0.36%).

In Seoul, despite the continued supply-demand imbalance due to strengthened residency requirements and the right to request contract renewal, the rise rate expanded in mid-to-low priced complexes in the Gangbuk area, while the rise rate slowed in high-priced jeonse in the Gangnam area.

Nevertheless, the Gangnam 4 districts such as Songpa-gu (0.22%), Gangdong-gu (0.21%), Seocho-gu (0.20%), and Gangnam-gu (0.19%) showed high jeonse price increase rates. Mapo-gu (0.20%), Dongjak-gu (0.19%), and Yongsan-gu (0.19%) also experienced significant rises.

Apartment jeonse prices in Gyeonggi-do rose by 0.27%, the same as last week. Goyang-si (0.44%), Namyangju-si (0.47%), and Hanam-si (0.44%), where there is anticipation for the 3rd new town subscription, saw significant increases, while Gwacheon-si (-0.04%) continued to decline due to the impact of new housing supply.

Sejong-si, where housing prices have risen sharply due to the National Assembly relocation issue, also saw its apartment jeonse price increase rate grow from 1.57% to 1.88%. The Korea Real Estate Board explained, "Prices rose in tandem with sales prices mainly in major complexes such as Goun, Dodam, and Areum-dong within the Happy City."

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