National Apartment Official Prices Rise Most in 14 Years... Sejong Soars 70%

Nationwide Apartment Official Prices Increase by 19%
Largest Rise Since 22.7% in 2007
Sejong, Where House Prices Soared Last Year, Up 70%

(Data from the Ministry of Land, Infrastructure and Transport)

[Asia Economy Reporter Moon Jiwon] This year, the publicly announced prices of apartments and other multi-family housing nationwide will rise by 19% compared to last year. This is the largest increase in 14 years. Seoul and Gyeonggi-do will see increases of approximately 20% and 24%, respectively. Sejong, where housing prices overheated the most nationwide last year, will experience a staggering increase of over 70% in publicly announced prices.

The Ministry of Land, Infrastructure and Transport announced on the 15th that the "2021 Multi-family Housing Publicly Announced Price Proposal" will be available for review starting from the 16th, and owners' opinions will be collected.

This year, the average nationwide increase rate of multi-family housing publicly announced prices was calculated at 19.08%. The increase rate of multi-family housing publicly announced prices showed a gradual upward trend, recording 4.44% in 2017, 5.02% in 2018, 5.23% in 2019, and 5.98% last year, but this year it recorded a double-digit increase rate.

This is the largest increase in 14 years since 2007, when the participatory government raised publicly announced prices significantly at once by 22.7%.

Seoul will rise by 19.91%, Busan by 19.67%, and Ulsan by 18.68%. Gyeonggi-do is expected to increase by 23.96%, and Daejeon by 20.57%. In particular, Sejong will surge by 70.68% compared to last year.

This year's publicly announced prices were calculated by applying the realization rate enhancement standards set in the "Real Estate Publicly Announced Price Realization Plan" established last November. Since the market prices of apartments and other multi-family housing rose significantly last year, the publicly announced prices linked to market prices also increased accordingly.

According to the Ministry of Land, the number of multi-family housing units with publicly announced prices exceeding 900 million KRW nationwide is 525,000 units (3.7%). Among these, 413,000 units (16.0%) are in Seoul.

Multi-family housing with publicly announced prices of 600 million KRW or less, to which special property tax rates apply, accounts for 13,088,000 units, representing 92.1% of the total. In Seoul, 1,825,000 units, or 70.6%, are priced at 600 million KRW or less.

(Data from the Ministry of Land, Infrastructure and Transport)

The median publicly announced price nationwide is 160 million KRW. By region, Sejong's median price is 423 million KRW, marking the first time since the start of multi-family housing price announcements in 2006 that Seoul (380 million KRW) has been surpassed.

The realization rate of publicly announced prices rose by 1.2 percentage points from 69.0% last year to 70.2%.

With the sharp rise in publicly announced prices, property taxes in Sejong, the Seoul metropolitan area, and other metropolitan cities are also expected to surge.

Multi-family housing with publicly announced prices exceeding 900 million KRW, subject to comprehensive real estate tax for single-homeowners, accounts for 3.7% nationwide, or 525,000 units, and 16.0%, or 413,000 units, in Seoul.

Multi-family housing priced at 600 million KRW or less, to which special property tax rates apply, accounts for 92.1% of the total, or 13,088,000 units. In Seoul, this represents 70.6%, or 1,825,000 units.

According to the government's property tax relief plan announced last year, single-homeowners with publicly announced prices of 600 million KRW or less will see a reduction in property tax burden compared to last year, as the tax rate reduction effect (22.2~50% for housing property tax) outweighs the increase effect caused by this year's rise in publicly announced prices (capped at 5~10%).

However, single-homeowners with publicly announced prices exceeding 900 million KRW or multi-homeowners whose combined publicly announced prices exceed 600 million KRW may be subject to comprehensive real estate tax.

A plan to ease health insurance premium burdens due to changes in publicly announced prices will also be implemented starting this November. Currently, monthly premiums per household may increase by about 2,000 KRW, but the government plans to lower premiums by expanding the property deduction by an additional 5 million KRW when calculating premiums for regional subscribers. As a result, the insurance premium burden for 7.3 million regional subscriber households, accounting for 89% of all regional subscribers, could be reduced by an average of 2,000 KRW per month.

The multi-family housing publicly announced price proposal will receive opinions from owners and others until the 5th of next month, undergo review by the Central Real Estate Price Public Announcement Committee, and be finalized and announced on the 29th.

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