Rising Sales Followed by Increased Jeonse Prices... Is Seoul's Housing Market Becoming More Unstable?

Korea Real Estate Board May 4th Week Apartment Price Trends
Sale Prices Maintain 0.10% Increase for 2 Consecutive Weeks
Jeonse Price Increase Also Rises from 0.03% to 0.04%
Price Uptrend Due to Expectations of Reconstruction Regulation Easing

The area around Eunma Apartment in Daechi-dong, Gangnam-gu, Seoul. Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Moon Jiwon] Seoul apartment prices have maintained a 0.10% increase rate for two consecutive weeks, continuing their upward trend. Centered around Nowon-gu and the Gangnam 3 districts, where expectations for revitalizing reconstruction are high, apartment prices are still rising significantly. In Seoul, the rent prices are also showing a gradual increase in their rise, raising concerns that housing instability for ordinary citizens may worsen.

According to the weekly apartment price trend for the fourth week of May announced by the Korea Real Estate Board on the 27th, as of the 24th, Seoul apartment prices rose by 0.10%, the same as the previous week. After the announcement of the 2·4 measures, the rate of increase in Seoul apartment prices began to decline, dropping to 0.05% in the first week of April, but last week, for the first time in 15 weeks, it recovered to a 0.10% increase rate.

This is because, following the election of Seoul Mayor Oh Se-hoon in last month's Seoul mayoral by-election, buying demand expanded mainly in major reconstruction promotion areas concentrated in Nowon-gu and Gangnam-gu. The Korea Real Estate Board explained, "In the Gangnam area, prices rose mainly due to reconstruction, while in the Gangbuk area, prices increased mainly in Nowon and Dobong-gu, where there are development benefits, maintaining last week's rate of increase."

Nowon-gu rose by 0.21% this week, maintaining a high increase rate of over 0.20% for four consecutive weeks. The increase was mainly in small and medium-sized and low-to-mid priced apartments in Sanggye and Junggye-dong. Dobong-gu (0.13%) saw significant increases mainly in the Chang-dong station area with development benefits and low-to-mid priced apartments in Ssangmun-dong.

South of the Han River, Seocho-gu (0.18%) continued its upward trend centered around Banpo and Seocho-dong near the land transaction permission zone. Songpa-gu (0.16%) saw continued record-high transactions mainly in Garak and Munjeong-dong, and Gangnam-gu (0.13%) also experienced significant price increases in reconstruction complexes. Additionally, Yangcheon-gu (0.10%), which has apartments in the Mokdong New Town area, and Yeongdeungpo-gu (0.09%), where Yeouido reconstruction complexes are concentrated, also maintained their upward trends.

Incheon’s apartment price increase rate slightly decreased from 0.47% last week to 0.43% this week but still showed a high increase rate. Bupyeong-gu (0.53%) rose mainly in Samsan and Sangok-dong, where there are expectations for transportation improvements, and Michuhol-gu (0.44%) increased mainly in older apartments in Yonghyeon and Gwankyo-dong.

Gyeonggi-do rose by 0.32%, the same as last week. Siheung-si (0.81%), which has seen a large increase in house prices since being designated as a 3rd phase new town, continued its high increase rate, and Uiwang-si (0.66%), Pyeongtaek-si (0.62%), Gunpo-si (0.51%), and Osan-si (0.48%) also saw significant increases.

Sejong City’s decline narrowed from -0.10% last week to -0.05% this week. The Real Estate Board explained, "Due to high listing prices and holding tax burdens, buying demand decreased, maintaining the downward trend from last week."

Apartment in downtown Seoul [Image source=Yonhap News]

Seoul apartment rent prices rose by 0.04% this week, increasing the rise compared to 0.03% last week. This is interpreted as rent prices rising mainly in areas with relocation demand due to redevelopment projects, such as Seocho-gu.

Seoul rent prices are also gradually increasing their rise, from 0.02% last month to 0.04% this week.

Nowon-gu (0.10%) saw rent price increases mainly in low-to-mid priced apartments in Wolgye and Sanggye-dong, and Dobong-gu (0.05%) rose mainly in large complexes in Chang and Dobong-dong. Seocho-gu (0.16%) experienced a sharp rise in rent prices due to a severe shortage of listings caused by relocation demand from redevelopment projects. Yeongdeungpo-gu (0.06%) saw increases mainly in Yeouido-dong reconstruction and station area large complexes, and Dongjak-gu (0.06%) saw rent price increases in Sadang and Dongjak-dong. In contrast, Yangcheon-gu (-0.02%) continued its downward trend.

Gyeonggi-do’s apartment rent price increase rate expanded from 0.12% to 0.14%. Siheung-si (0.68%), Pyeongtaek-si (0.48%), Dongducheon-si (0.40%), and Osan-si (0.38%) all saw large increases. Sejong City’s rent price increase rate also expanded its decline from -0.07% to -0.14%. This is interpreted as the decline worsening due to an increase in new housing supply.

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