House Prices Nationwide Rose Over 13% This Year... 5 Regions Exceeding the Average

[Asia Economy Reporter Yuri Kim] Despite various real estate regulations, the apartment market in 2020 recorded a double-digit growth rate. In the first half of the year, the balloon effect issue led to a noticeable rise in the outskirts of Seoul and the metropolitan area. In the second half, a combination of panic buying and a shift from renting to purchasing caused apartment prices to increase across both the metropolitan area and provinces.

According to Real Estate 114 on the 25th, the nationwide apartment sale prices rose by 13.46% this year, nearly three times higher than last year's 4.17%. Notably, all 17 metropolitan cities and provinces experienced price increases simultaneously.

There were five regions that exceeded the national average: Sejong, Daejeon, Gyeonggi, Busan, and Seoul, in order of highest growth rate. Sejong saw the largest increase, soaring 42.81% this year. This significant rise was driven by continuous population inflow, improved living conditions, a decrease in apartment supply, and the relocation of the administrative capital to Sejong City.

Daejeon recorded the second-highest increase at 19.87%. Due to the influx of investment demand, apartment prices continued to rise, leading to the designation of the entire Daejeon area as a regulated zone and Dong, Jung, Seo, and Yuseong districts as speculative overheating districts under the June 17 real estate measures. However, development prospects such as the designation as an innovation city and the promotion of subway line 2 helped sustain the upward trend in the second half of the year.

Gyeonggi Province rose by 17.48%. Hanam saw the largest increase, fueled by the opening of the first phase of the subway line 5 extension (Hanam Line) and expectations for the 3rd new town housing subscription. Hwaseong experienced strong demand due to a shortage of rental listings, and the balloon effect contributed to significant price increases in Suwon, Yongin, and Seongnam (collectively known as Su-Yong-Seong).

Busan's apartment prices increased by 15.29%, supported by a strong pre-sale market and the balloon effect.

Seoul's apartment prices rose by 13.81%, driven by continued demand for mid-to-low priced apartments under 900 million KRW in Nowon, Dobong, and Gangbuk districts, as well as price increases in Gwanak, Dongdaemun, and Jung districts, which have good access to office facilities. In the first half of this year, strengthened loan regulations caused a balloon effect in areas with many apartments priced under 900 million KRW, leading to significant price increases in these regions. Although loan restrictions on homes priced over 900 million KRW and tax-saving sales of reconstruction units in the Gangnam area temporarily caused a price decline in Seoul apartments, the ongoing balloon effect, panic buying, and the shift from rental demand to purchase have kept the upward trend intact.

Meanwhile, regions such as Gangwon, Gyeongnam, Gyeongbuk, Chungbuk, Jeonbuk, and Ulsan, which experienced price declines last year, reversed to price increases this year due to reduced apartment supply, partial economic recovery, and the balloon effect.

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