Seoul Apartment Prices Continue to Rise This Week... Government Warnings Ineffective

Korea Real Estate Board Apartment Price Trends for the First Week of July
Seoul Sale Price Increase from 0.12% to 0.15%
Jeonse Price Also Expands from 0.10% to 0.11%

Apartment complex viewed from Seoul Sky, the observation deck of Lotte World Tower in Songpa-gu, Seoul [Image source=Yonhap News]

[Asia Economy Reporter Moon Jiwon] The rise in apartment prices in Seoul has expanded again this week. Apartment prices in the Gangnam 3 districts (Gangnam, Seocho, Songpa), where expectations for reconstruction are high, and Nowon-gu have risen significantly, while newly built and mid-to-low priced complexes are also showing an increasing upward trend. In Seoul, the increase in jeonse (long-term lease) prices is also accelerating, raising concerns that housing instability for low-income residents may worsen in the second half of the year.

According to the 'Weekly Apartment Price Trend for the First Week of July' released by the Korea Real Estate Board on the 8th, as of the 5th, apartment prices in Seoul rose by 0.15% compared to the previous week (0.12%), expanding the rate of increase. This is the highest rise since the third week of December 2019 (0.20%). The Real Estate Board explained, "Due to transportation benefits, rising jeonse prices, and a decrease in listings, the upward trend continues mainly in mid-to-low priced areas, newly built, and reconstruction-focused complexes."

Nowon-gu, where buying demand is surging amid expectations of eased reconstruction regulations, rose 0.29% this week. Songpa-gu (0.20%), Seocho-gu (0.19%), and Gangnam-gu (0.18%) also saw increased rises centered on major reconstruction complexes. Gangdong-gu (0.14%) rose mainly in Dunchon and Amsa-dong, while Dongjak-gu (0.18%) increased mainly in Sangdo, Sadang, and Heukseok-dong.

Gyeonggi Province recorded a 0.43% increase, the same as the previous week. Areas with development benefits from the Metropolitan Area Express Railway (GTX), such as Anyang Dongan-gu (0.93%), Gunpo-si (0.76%), and Uiwang-si (0.73%), saw significant price increases centered on complexes cheaper than neighboring areas. Osan-si (0.71%) and Ansan Danwon-gu (0.70%) also continued their upward trend.

Although the government has recently warned that housing prices are overvalued, the market seems unaffected. On the 5th, Minister of Land, Infrastructure and Transport Noh Hyung-wook held a press briefing at the Sejong Convention Center and said, "Whether the housing price decline comes soon or in 2-3 years, if you buy now with excessive loans, you may face difficulties if asset prices readjust when you need to dispose of the property later."

Incheon, which saw the highest apartment price increase nationwide in the first half of this year, saw its growth rate slightly shrink from 0.57% last week to 0.46% this week. Sejong City, which had been declining since the third week of May, rose 0.01% this week, returning to an upward trend after eight weeks. The Real Estate Board analyzed, "With high listing prices causing buying demand to pause, prices rose mainly in mid-to-low priced areas of Jochiwon-eup, shifting from decline to increase."

Real estate price board at a brokerage office in Mapo-gu, Seoul
[Image source=Yonhap News]

The jeonse market is showing increased rises across the metropolitan area, Seoul, and provinces, creating a nationwide atmosphere of unease.

In Seoul, jeonse prices rose 0.11%, a sharper increase compared to the previous week (0.10%). The upward trend continues mainly in areas with relocation demand due to redevelopment projects, with significant rises in Seocho-gu (0.29%), Gangdong-gu (0.14%), and Songpa-gu (0.13%). Additionally, Dongjak-gu (0.14%), Nowon-gu (0.11%), Dobong-gu (0.11%), Mapo-gu (0.10%), and Gangnam-gu (0.10%) are also experiencing a shortage of jeonse listings.

Gyeonggi Province also saw the rise in apartment jeonse prices expand from 0.20% last week to 0.26% this week. Notable increases were seen in Siheung-si (0.83%), Ansan Danwon-gu (0.50%), Pyeongtaek-si (0.49%), Dongducheon-si (0.44%), and Uijeongbu-si (0.41%). Incheon’s rise narrowed slightly from 0.44% to 0.41%, but it still maintains a high growth rate.

Sejong City’s jeonse price decline widened from -0.01% to -0.12%. The Real Estate Board explained, "Due to seasonal off-season and new move-in volumes, the jeonse price decline in Sejong City continues."

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