Apartment Prices in the Seoul Metropolitan Area Rise 13% in the First Half of the Year... Highest in 19 Years

KB Statistics Show Prices Already Higher Than Entire Last Year
Apartment Prices Rose Most in Deogyang-gu, Goyang-si
Siheung-si Tops Nationwide Jeonse Price Increase Rate

[Asia Economy Reporter Kangwook Cho] The nationwide apartment price increase rate in the first half of this year (January to June) has already surpassed the entire increase rate of last year. In particular, apartment prices in the Seoul metropolitan area rose by about 13% during this period, marking the highest increase rate in 19 years.

According to the monthly housing price trend time series statistics from KB Kookmin Bank on the 4th, nationwide apartment prices rose 9.97% in the first half of this year. This figure exceeds last year's annual increase rate of 9.65%.

In the Seoul metropolitan area, apartment prices increased by 12.97%, also surpassing last year's annual increase rate of 12.51%. This is the highest increase rate in 19 years since 2002, when the first half recorded a 16.48% rise.

By region, Gyeonggi-do recorded a cumulative increase rate of 15.35% in the first half, showing significant growth. Areas with increases over 20% include Siheung (24.53%), Goyang (21.38%), Dongducheon (20.58%), and Uijeongbu (20.37%). Expanding the scope to districts, Deogyang-gu in Goyang-si (25.49%) saw the highest apartment price increase nationwide. The rise was particularly large in areas with transportation expectations such as the Seoul Metropolitan Express Railroad (GTX).

Jeonse (long-term lease) prices are also showing unusual trends. Nationwide apartment jeonse prices rose 5.54% in the first half, the highest in 10 years since 2011 (9.33%), which is considered a 'jeonse crisis period.'

In the Seoul metropolitan area, prices increased by 7.14%, a rise comparable to the first half of 2011 (7.88%). Looking at last month alone, nationwide jeonse prices rose 1.24%, and the metropolitan area increased by 1.53%, marking the highest figures this year.

The region with the highest jeonse price increase rate nationwide in the first half of this year was Siheung-si (15.21%). Siheung-si was the area with the largest increase in both apartment sales prices and jeonse prices on a city basis nationwide during the first half of this year.

In the second half of the year, factors such as transportation benefits like GTX, interest rate hikes, and pre-subscription for the 3rd New Town are expected to influence the real estate market. Especially with the presidential election next year, expectations for easing real estate policy regulations are growing, and various development pledges are expected to be announced, which will further drive up housing prices in the second half of this year. A shortage of housing supply and instability in jeonse prices are also likely to act as upward pressure on apartment prices in the second half.

Kim In-man, head of Kim In-man Real Estate Economic Research Institute, said, "With the complete collapse of trust in the government's real estate policies, combined with transportation benefits, supply shortages, and development pledges related to the presidential election, it is highly likely that apartment prices in the metropolitan area will 'rise and then fall' this year."

On the other hand, the pre-subscription for the 3rd New Town in the metropolitan area and the possibility of interest rate hikes in the second half of this year are factors that deepen the concerns of non-homeowners about whether to buy apartments. The planned pre-subscription volume for the second half of this year is about 30,000 households. Additionally, Bank of Korea Governor Lee Ju-yeol has repeatedly emphasized the need for interest rate hikes, and Deputy Prime Minister for Economy Hong Nam-ki has expressed support for this, leading the market to anticipate up to two interest rate hikes in the second half. The Korea Research Institute for Human Settlements has released research results showing that if interest rates rise by about 1 percentage point, housing prices in the metropolitan area fall by about 0.7 percentage points annually.

Park Won-gap, senior real estate expert at KB Kookmin Bank, said, "Due to the possibility of interest rate hikes in the second half, large-scale pre-subscription volumes, and the burden from prolonged rapid price increases, it will be difficult for apartment prices to rise more than in the first half."

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