Capital Area Apartment Prices Hit 'Record High Increase' Again... Seoul Sale and Jeonse Prices Surge

Korea Real Estate Board July Third Week Apartment Price Trends
Seoul, Incheon, Gyeonggi Apartment Price Increase All Expand
Capital Region Hits Record High Again After One Month
Jeonse Market Also Unstable...Rapid Rise in Capital Region and Provinces

View of Goyang Changneung District, the 3rd New Town, as seen from Bukhansan [Image source=Yonhap News]

Apartment prices in the Seoul metropolitan area rose by 0.36% this week, marking the highest increase in about a month and setting a new all-time record. This was due to the expanded rate of increase in apartment sale prices in Seoul, Incheon, and Gyeonggi Province. Despite growing concerns over asset value declines amid the resurgence of COVID-19, housing prices continue to soar independently of these worries.

In the metropolitan area, not only sale prices but also jeonse (long-term lease) prices have risen more sharply, raising concerns about the increasing hardship for ordinary citizens.

According to the weekly apartment price trend for the third week of July announced by the Korea Real Estate Board on the 22nd, as of the 19th, apartment prices in the metropolitan area rose by 0.36%, an increase from the previous week's 0.32%. The metropolitan area recorded an all-time high increase of 0.34% in the second week of last month, then surpassed it with 0.35% in the third week of the same month just a week later. This week, after about a month, it broke the record again.

In the metropolitan area, the rate of increase expanded in Seoul, Gyeonggi Province, and Incheon. First, Seoul's increase rate expanded from 0.15% last week to 0.19% this week. The Real Estate Board analyzed, "amid concerns over possible overvaluation of housing prices and asset value decline due to the spread of COVID-19 variants, increases were mainly seen in mid-to-low price areas such as Nowon, Dobong, and Gangbuk districts, as well as in outer areas of the Gangnam district."

Nowon-gu (0.35%), Dobong-gu (0.27%), and Gangbuk-gu (0.18%), where buying demand is gathering due to expectations of redevelopment regulation easing, saw significant apartment price increases. Likewise, major reconstruction-promoting districts such as Gangnam-gu (0.20%), Seocho-gu (0.18%), and Songpa-gu (0.18%) continued their upward trend. Yeongdeungpo-gu (0.21%) and Gangseo-gu (0.20%), where there is anticipation for public redevelopment, also saw large increases.

Incheon rose by 0.46% this week, up from 0.44% last week. This is interpreted as influenced by expectations for transportation improvements and a 'price matching' effect. Gyeonggi Province also saw its increase rate grow from 0.40% to 0.44%. Anseong-si (0.89%), Anyang Dongan-gu (0.87%), Gunpo-si (0.76%), Suwon Gwonseon-gu (0.66%), and Pyeongtaek-si (0.66%) had particularly large increases.

Sejong, which had continued a downward trend in housing prices due to accumulated listings, turned to an increase this week at 0.05%, up from -0.12% last week.

View of apartments in Yongsan-gu and Seocho-gu, Seoul, as seen from Namsan, Seoul [Image source=Yonhap News]

The jeonse market also remains unstable. Jeonse prices rose significantly nationwide, including in Seoul, the metropolitan area, and other regions.

First, in the metropolitan area, prices rose by 0.25% this week, an increase from 0.22% last week. In Seoul (0.13%→0.15%), although some areas saw an increase in listings following the National Assembly's withdrawal of the two-year mandatory residence regulation for reconstruction, most areas experienced a larger rise due to moving demand during the school vacation period and a decrease in newly completed housing supply.

In Nowon-gu (0.21%), jeonse prices rose mainly in large complexes in Sanggye and Junggye-dong, while in Dobong-gu (0.19%), increases were centered around new buildings near Chang-dong station. South of the Han River, Seocho-gu (0.25%), which has relocation demand due to redevelopment projects, continued to see sharp jeonse price increases, while Songpa-gu (0.16%), Gangdong-gu (0.16%), and Gangnam-gu (0.14%) all showed unstable trends. However, the overall increase in the Gangnam 4 districts was reduced due to increased listings in some reconstruction complexes affected by the withdrawal of the two-year mandatory residence rule.

Incheon (0.34%→0.35%) and Gyeonggi Province (0.24%→0.29%) also saw expanded jeonse price increases. In Gyeonggi, Siheung-si (0.82%), Danwon-gu in Ansan, and Dongan-gu in Anyang (0.59%) showed particularly unstable conditions. However, Bundang-gu in Seongnam (-0.12%) shifted from an increase to a decrease due to the impact of new housing supply.

Sejong City saw jeonse prices fall by 0.03%, the same as last week. Although sale prices rose slightly this week, the increase in new housing supply is interpreted as having brought some stability to jeonse prices.

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