Polarization of Apartments under Moon Administration Hits Record High... Low-priced Down 1% While High-priced Up 83%

Since Moon Administration Inauguration, Quintile Ratio Rose from 4.7 to 8.8, Highest Ever
1st Quintile Apartment Prices Down 1%, 5th Quintile Up 83.5%
Gap Between Seoul Metropolitan and Provincial Apartment Prices Widens Further

[Asia Economy Reporter Ryu Tae-min] The price gap between high-end and low-end apartments nationwide has widened to an all-time high. Compared to the launch of the Moon Jae-in administration, the apartment price polarization index has nearly doubled in just over four years.

According to the KB Kookmin Bank monthly housing price trend time series data on the 27th, the nationwide apartment 5-quintile ratio was recorded at 8.8 as of this month. This is the highest figure since the related statistical survey began in December 2008. Compared to May 2017 (4.7), when the Moon Jae-in administration took office, it is 1.87 times higher.

The 5-quintile ratio divides housing prices into five equal parts and calculates the average price of the top 20% (5th quintile) divided by the average price of the bottom 20% (1st quintile). It represents the price gap between high-end and low-end housing, with a higher ratio indicating more severe polarization.

Since the Moon administration took office, the difference in price growth rates between low-end and high-end apartments has become clear. The nationwide average apartment price in the 1st quintile fell by 1.5 million won (1.2%) from 118.37 million won in May 2017 to 116.87 million won this month, while the 5th quintile apartments soared by more than 468.77 million won (83.5%) from 560.78 million won to 1.02955 billion won during the same period. Notably, the nationwide apartment 5-quintile ratio has widened for 23 consecutive months since May 2019 (6.24).

The gap in apartment price growth rates between regions has also increased. Since the Moon administration took office, the 1st and 5th quintile apartment prices in the Seoul metropolitan area rose by 20.1% and 91.1%, respectively, whereas in regions excluding the metropolitan area and major cities, the 1st and 5th quintile apartment price growth rates were only -10.1% and 18.2%, respectively.

However, Seoul’s 5-quintile ratio has remained at a level similar to that at the start of the Moon administration. It began at 4.2 in May 2017, rose to a peak of 5.1 in April 2018, but after fluctuating, it fell back to 4.1 this month. This is because demand for low-end apartments increased amid the apartment boom, causing their prices to rise accordingly.

Park Won-gap, Senior Real Estate Specialist at KB Kookmin Bank, explained, “The recent decrease in Seoul’s 5-quintile ratio is due to the sharp rise in low-end apartment prices, leading to an upward leveling.” He added, “Although polarization has eased, it has become even more difficult for ordinary citizens and young non-homeowners to secure their own homes.”

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