Soaring Seoul Apartment Price Increase Rate in the First Half of the Year... Already Surpasses Last Year's Annual Increase Rate

Korea Real Estate Board Survey... 3.18% Increase in First Half, Surpassing Last Year's 3.01%
Preference for 'Smart Single Home' Rises Due to Government Regulations... Sharp Rise Centered in Gangnam Area
Outskirts Popular Among Genuine Buyers Seeking Own Home... Small and Medium Apartments Also Reach '1 Billion'

[Asia Economy Reporter Ryu Taemin] As housing prices soar to unprecedented levels, the rate of increase in apartment prices in Seoul has already surpassed last year's annual growth rate in just the first half of this year. With the government tightening regulations on multi-homeowners, prices are rapidly rising, especially in the Gangnam area. Additionally, demand from buyers in their 30s rushing to secure their own homes is pushing them toward the outskirts of Seoul, boosting the popularity of mid- to low-priced complexes.

According to the time series data from the Korea Real Estate Board's nationwide housing price trend survey on the 19th, Seoul apartment prices rose by 3.18% in the first half of this year, exceeding last year's annual increase of 3.01%. Starting from November last year (0.12%), the price increase accelerated for four consecutive months (0.28% → 0.40% → 0.67%). After the announcement of the 2·4 supply plan, which includes the 3rd phase new towns and downtown public redevelopment projects, the growth rate slightly decreased to 0.49% in March and 0.43% in April this year. Following the April 7 by-elections, expectations for the easing of reconstruction regulations grew, and the upward trend resumed, rising from 0.48% in May to 0.67% in June.

This appears to be driven by the steady rise in housing prices in the Gangnam area despite various government taxes and regulatory policies targeting high-priced homes. According to the Korea Real Estate Board, the average sale price of apartments in the southeastern region known as the Gangnam 4 districts surpassed 1.5 billion KRW for the first time since statistics began in January 2012, reaching 1.51757 billion KRW last month. Among the districts, Seocho-gu led with a 4.20% increase in the first half, reaching 1.87339 billion KRW, followed by Gangnam-gu (1.8188 billion KRW, 3.94%), Songpa-gu (1.34198 billion KRW, 4.52%), and Gangdong-gu (835.83 million KRW, 3.46%).

Outlying areas with relatively affordable housing prices, such as Nowon-gu and Dobong-gu, are also seeing price increases as demand surges. In particular, Nowon-gu, which avoided the land transaction permit zone regulation in April, saw a sharp rise centered on reconstruction complexes in Sanggye, Junggye, and Hagye-dong, recording a 5.08% increase, the highest housing price growth rate in the first half. According to KB Housing Price Trend time series data, as the upward trend continues in these areas with many small- and medium-sized apartments, the average sale price of small- and medium-sized (over 60㎡ to 85㎡ or less) apartments in Seoul surpassed 1 billion KRW for the first time in June, reaching 1.01262 billion KRW. This is exactly one year after surpassing 800 million KRW in June last year. By November of the same year, prices had risen to 900 million KRW, showing a steep upward trend.

Ham Youngjin, head of the Zigbang Big Data Lab, said, “As the tax burden increases, preference for a ‘smart single home’ centered in Gangnam is rising, and after the by-elections, expectations for easing reconstruction regulations have grown, leading to continued price increases mainly in high-priced homes.” He added, “Moreover, as housing prices continue to rise, buyers in their 30s rushing to secure their own homes are flocking to the outskirts of Seoul, causing mid- to low-priced complexes to also rise.”

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