Unusual Surge in Seoul Metropolitan Area Housing Prices... Many Places Already Up Over 10%

Uiwang and Siheung Prices Rise Over 20% This Year
Steeper Increase Compared to Last Year
GTX Benefits and Demand Shift from Seoul
Buying Moves to Less-Pricey Areas
Some Concern Over Peak... Cycle Inflection Point

[Asia Economy Reporter Moon Jiwon] Apartment prices in the Seoul metropolitan area are soaring, especially in key areas of Gyeonggi-do such as Uiwang and Siheung. As the market approaches the midpoint of the year, there are already many places where prices have risen by more than 10%. This is nearly twice the rate of increase compared to the same period last year. Amid weakened expectations for housing price stabilization due to the government's repeated failures in real estate policies, the combination of 'real demand' pushed out of Seoul due to unaffordable prices and 'investment demand' driven by the development of the Metropolitan Area Express Train (GTX) is causing apartment prices in the metropolitan area to skyrocket.

Many places with over 10% increase... Gyeonggi-do is a 'hot market'

According to the Korea Real Estate Board on the 25th, the top 10 regions with the highest cumulative apartment price increases this year are concentrated in the Seoul metropolitan area, including Gyeonggi-do and Incheon. Uiwang-si in Gyeonggi-do showed the steepest rise with a weekly cumulative increase of 21.78%. Following were Siheung-si (20.17%), Danwon-gu in Ansan (18.93%), Yeonsu-gu in Incheon (17.09%), and Dongan-gu in Anyang (16.82%). This increase is about 4 to 5 times the rise seen in Nowon-gu in Seoul, which had the highest apartment price increase in Seoul this year at 3.54%.

The rise in apartment prices in the metropolitan area is mostly centered on undervalued complexes that had relatively low increases last year. Even Uiwang-si and Siheung-si, which surpassed a 20% increase, only rose by 6.01% and 6.93% respectively during the same period last year. Areas like Yangju and Uijeongbu, which surged 12-14% this year, had only 1-2% increases last year. On the other hand, areas such as Paldal-gu and Yeongtong-gu in Suwon and Suji-gu in Yongin, which led the metropolitan area price increases early last year, saw their growth rates cut by about half.

Ham Young-jin, head of the Zigbang Big Data Lab, analyzed, "Outlying areas that had not risen much before, such as planned GTX opening sites and around the 3rd New Towns, are seeing significant increases. Given risks like interest rate hikes, buying demand is shifting to less expensive areas."

Real demand buyers 'all-in' and GTX positive factors

The increase in real demand buyers moving to outskirts like Gyeonggi-do due to high sales and rental prices in Seoul is also influencing the rise in metropolitan area housing prices. In Seoul, even older small-to-medium apartments are approaching 1 billion KRW in sales price, leading newlyweds and young people without homes to purchase apartments in Gyeonggi-do through 'all-in' loans (borrowing to the limit). In particular, many are forced to move outside Seoul to find apartments priced below 600 million KRW to use low-interest Bogeumjari loans, often described as a 'crying while eating mustard' situation.

However, considering that housing prices typically rise starting from high-priced complexes in Gangnam and then spread to Seoul outskirts, the metropolitan area, and provinces, concerns are emerging that current price levels may have reached a peak. Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, warned at the early-month real estate market inspection meeting, "Seoul apartment prices are approaching the peak level before adjustment due to the financial crisis," cautioning against continued buying momentum.

Ko Jong-wan, head of the Korea Asset Management Research Institute, diagnosed, "With housing prices rising for 7 to 8 years, there are analyses suggesting a significant bubble in Seoul and metropolitan area apartment prices, indicating clear signs of a peak. From a real estate cycle perspective, a turning point is coming."

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