Seoul's Cheapest Apartment Soars Past 500 Million Won... 4.3 Times the National Average

Seoul Apartments Bottom 20% Average 504.58 Million KRW

While National Average Rises 7.33 Million KRW,
Seoul Average Increases Over 100 Million KRW

[Asia Economy Reporter Kim Hyemin] The average price of the cheapest apartments in Seoul has surpassed 500 million won. Compared to the national average, the gap has widened to nearly five times. As mid- to low-priced apartment prices soar, homeownership for young people is becoming an 'insurmountable wall.'

According to the monthly housing price trend time series data from KB Kookmin Bank's Live Real Estate on the 6th, the average price of apartments in the lowest 20% price bracket (1st quintile) in Seoul last month was 505.48 million won. This is the first time since the related statistics began in December 2008 that the 1st quintile price has exceeded 500 million won.

As recently as March last year, the average price of low-priced apartments in Seoul was 392.75 million won. However, with the rapid rise in housing prices last year, it increased by more than 100 million won (28.4%) within a year. Compared to the annual increase of at least 10 million won and up to 50 million won from 2016 to 2019, this is a sharp rise. The average price of 1st quintile apartments also showed the highest rate of increase among all quintiles.

The gap with the national average is also widening. Last month, the national average price of 1st quintile apartments was 115.99 million won, up 7.33 million won (6.7%) from a year earlier. The gap with Seoul is 4.35 times, and considering that Seoul is included in the national average, the actual gap is likely even larger. Last year, the gap was about 3.6 times. The average price of low-priced apartments in Seoul is about half that of high-priced apartments nationwide (5th quintile, 1.01587 billion won).

The sharp rise in prices of low-priced apartments in Seoul is interpreted as a balloon effect of real estate regulations. As both jeonse (long-term lease) and sale prices surged last year due to laws such as the Lease Protection Act, panic buying by young people focused on low-priced apartments. Ye Kyung-hee, senior researcher at Real Estate 114, said, "Most of those who purchased low-priced apartments are actual users."

Although indicators show that Seoul housing prices have stabilized since last month, it is expected that the outskirts of Seoul, where low-priced apartments are concentrated, will continue to see demand from actual users, maintaining price competition. For example, the 59.89㎡ unit at Gocheok Park Prugio in Guro-gu saw its highest price rise from 790 million won (March 3) to 808 million won (March 20) within a month. During the same period, the 54㎡ unit at Dongbu Apartment in Sangbong-dong, Jungnang-gu, also continued to rise from 587.5 million won to 600 million won.

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