Despite Concerns Over COVID-19 and Interest Rate Hikes... Seoul's 'Sales and Jeonse' Prices Soar

Korea Real Estate Board July 2nd Week Apartment Price Trends
Seoul Apartment Prices Up 0.15%...Same as Previous Week
Increased Caution Due to COVID-19 but Upward Trend Continues
Incheon and Gyeonggi House Prices Show Slightly Reduced Growth Rate

Price board at a real estate agency in Mapo-gu, Seoul

[Asia Economy Reporter Moon Jiwon] As the fourth wave of COVID-19 intensifies, the apartment sales market has become more cautious, but apartment prices in Seoul and the metropolitan area continue to soar due to ongoing expectations of relaxed reconstruction regulations and favorable transportation developments.

According to the "Weekly Apartment Price Trends for the Second Week of July" released by the Korea Real Estate Board on the 15th, as of the 12th, apartment prices in Seoul rose by 0.15%, the same as the previous week. Although the rate of increase did not grow, it maintained the highest rise since the third week of December 2019 (0.20%).

The Real Estate Board explained, "Due to concerns over interest rate hikes and the spread of COVID-19 variants, the market has generally been cautious with few purchase inquiries, but areas with expectations such as reconstruction or development benefits continued to see price increases."

Nowon-gu (0.27%), where expectations for relaxed reconstruction regulations are high, saw significant increases centered around the Sanggye and Junggye station areas and reconstruction promotion complexes. Seocho-gu (0.19%), Gangnam-gu (0.16%), Songpa-gu (0.16%), and Gangdong-gu (0.16%) in the Gangnam area also continued their upward trend. Geumcheon-gu (0.18%) experienced strong buying demand mainly in the mid-to-low price ranges of Gasan and Doksan-dong.

Incheon (0.46%→0.44%) and Gyeonggi-do (0.43%→0.40%) saw a slight decrease in the rate of increase but prices are still rising steeply. In Incheon, areas such as Yeonsu-gu (0.53%), Namdong-gu (0.48%), and Bupyeong-gu (0.45%) maintained their upward trend due to the perception that they are undervalued compared to Seoul.

Apartment prices in major Gyeonggi-do areas such as Anyang Dongan-gu (0.86%), Anseong-si (0.85%), and Gunpo-si (0.70%) also rose significantly, driven by the positive impact of the Metropolitan Area Express Train (GTX). However, in Sejong City, the accumulation of listings and downward adjustment of asking prices caused the apartment price growth rate to plummet from 0.01% last week to -0.12% this week.

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

The jeonse (long-term lease) market remains unstable. Apartment jeonse prices in Seoul rose by 0.13%, expanding the increase compared to the previous week (0.11%). The Real Estate Board explained, "Jeonse prices rose mainly in areas with relocation demand due to redevelopment projects or school district demand, leading to a larger increase compared to last week."

Jeonse prices in Seocho-gu (0.30%), where there is relocation demand from redevelopment projects, surged, and Songpa-gu (0.19%), Gangdong-gu (0.15%), and Gangnam-gu (0.14%) also saw relatively significant increases. Yangcheon-gu (0.25%), with moving demand during the school vacation season, and Dongjak-gu (0.22%), with redevelopment relocation demand, also rose sharply. North of the Han River, jeonse prices increased in Nowon-gu (0.14%), Yongsan-gu (0.14%), and Gangbuk-gu (0.13%).

In Gyeonggi-do, apartment jeonse prices rose by 0.24%, a decrease in the rate of increase compared to the previous week (0.26%). In Incheon, the jeonse price growth rate also slightly decreased from 0.41% last week to 0.34% this week. However, areas such as Siheung-si (0.60%), Ansan Danwon-gu (0.49%), Uijeongbu-si (0.46%), and Dongducheon-si (0.44%) still show steep jeonse price increases.

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