Seoul Apartment Price Increase Widens Again... Buying Demand Shifts to Seoul to Avoid Regulated Areas

Korea Real Estate Board Weekly Apartment Prices for the Third Week of December
National Apartment Prices Rise 0.29% for 2 Consecutive Weeks...Highest Level
Seoul Uptrend from 0.03% to 0.04% to 0.05%
Paju, Ulsan, etc. Slow Down After Regulation Designation
However, Gongju, Pohang Nam-gu, etc. Rise Even More

Apartments in Gangbuk, Seoul, viewed from Namsan (Photo by Yonhap News)

[Asia Economy Reporter Moon Jiwon] The rate of apartment price increases in Seoul and the metropolitan area has expanded compared to the previous week. However, in areas newly designated as regulated zones such as Paju in Gyeonggi Province, Busan, and Ulsan, buying demand has weakened somewhat, leading to a reduced rate of increase. Analysts suggest that as most regions nationwide are now under regulatory restrictions, liquidity in the market is flowing back to Seoul.

According to the weekly apartment price trend report for the third week of December released by the Korea Real Estate Board on the 24th, the nationwide apartment price increase rate as of the 21st remained steady at 0.29%, the same as the previous week. Although the increase rate did not expand further, it maintained the highest rate recorded for two consecutive weeks since the Korea Real Estate Board began compiling statistics in May 2012.

Apartment prices in Seoul rose by 0.05% this week, up from 0.04% the previous week. The increase rate has been rising for three consecutive weeks this month, indicating a recovery in buying demand. The Korea Real Estate Board explained, "The expansion of low-interest liquidity and a decrease in new housing supply continue to have an effect, and buying demand has slightly increased mainly in relatively low- to mid-priced complexes and redevelopment projects, leading to price increases primarily in major complexes in the Gangnam 4 districts (Gangnam, Seocho, Songpa, and Gangdong districts)."

In fact, apartment prices in Songpa-gu rose by 0.10% this week, marking the highest increase in about five months since the second week of July (0.13%). This is the highest increase rate among Seoul's autonomous districts. Seocho-gu (0.09%) and Gangnam-gu (0.08%) also saw significant increases, mainly in low- to mid-priced complexes and redevelopment project areas, and Gangdong-gu (0.07%) is also experiencing a growing rate of increase. Although apartment prices in the Gangnam area had been stagnant due to continuous government regulations and increased property tax burdens, the recent increase rates are rising again.

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

The apartment price increase rate in Gyeonggi Province rose slightly from 0.30% last week to 0.31% this week. While Paju, which attracted buying demand after Gimpo was designated as a regulated area on the 20th of last month, saw a significant price increase of 0.98%, the rate of increase narrowed compared to the previous week (1.11%) as buying demand weakened following its designation as a regulated area on the 18th.

Similar to Paju, other areas such as Busan and Ulsan, which were partially designated as regulated zones, also saw a reduction in their increase rates. Ulsan's rate dropped from 0.79% to 0.62%, Busan's from 0.71% to 0.61%, and Gwangju's from 0.40% to 0.29%. In Changwon's Uichang-gu in Gyeongnam, designated as a speculative overheating district, the increase rate shrank from 0.90% to 0.50%, and buying demand weakened in Cheonan, Chungnam (0.46%→0.39%), Gwangyang, Jeonnam (0.19%→0.17%), and Gyeongsan, Gyeongbuk (0.28%→0.05%).

On the other hand, after being designated as a regulated area, apartment prices in Gongju, Chungnam, surged significantly from 0.30% to 2.31%. Apartment prices also rose more steeply in Nam-gu, Pohang, Gyeongbuk (0.41%→0.56%), Yeosu, Jeonnam (0.18%→0.21%), and Suncheon, Jeonnam (0.16%→0.19%). The Korea Real Estate Board explained, "The effects of the regulatory area designations announced on the 17th are partially reflected in these statistics."

The nationwide apartment jeonse (long-term lease) price increase rate remained steady at 0.30%, the same as the previous week. In Seoul, jeonse prices rose by 0.14% following the previous week. In the Gangbuk area, jeonse price increases continued mainly in areas with good residential environments and relatively low to mid prices, while in the Gangnam area, high-priced jeonse listings accumulated, causing the rate of increase to slow.

The increase rates in Gyeonggi Province (0.27%→0.25%) and Incheon (0.34%→0.37%) narrowed. Conversely, in Sejong City, the shortage of jeonse listings persisted, expanding the jeonse price increase rate from 1.88% to 1.96%.

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