House Prices Keep Rising as if Mocking the Government... 'Bull Market' in Both 수도권 and 지방

"Overvaluation of Housing Prices" Government Warnings Ineffective
High Prices Soaring Not Only in the Capital Area but Also in Provinces
"Let's Buy Houses" Buying Sentiment Also Strengthening
Nationwide Boom... Remote Investment Also Gaining Attention

Hong Nam-ki, Deputy Prime Minister for Economy and Minister of Economy and Finance Photo by Yonhap News

Despite the government's repeated warnings that "house prices are overvalued," apartment prices in the Seoul metropolitan area and other regions are rising even more sharply. This week, price increases expanded in 173 out of 176 cities, counties, and districts nationwide, and the appetite for purchasing apartments appears to be strengthening further. Some voices express concern that nationwide house prices have escaped the government's control.

According to the Korea Real Estate Board on the 13th, not only in Seoul and the metropolitan area but also in regions where the growth rate had been low, apartment buying sentiment has recently increased, causing prices to rise rapidly. The nationwide apartment sales supply-demand index rose by 0.2 points from last week’s 107.8 to 108.0. This is the highest level in five weeks since the first week of July (108.0). This index is calculated based on data from frontline real estate agencies and online real estate listings, with 100 as the baseline; values above 100 indicate stronger buying sentiment.

Apartment buying sentiment was highest in Incheon nationwide, recording 115.3, the highest since July 2012. This is interpreted as a concentrated buying trend influenced by the Seoul metropolitan area’s GTX (Great Train Express) benefits and the 'price matching' effect with Seoul. Besides this, buying demand increased in most regions including Seoul, Gyeonggi, Gangwon, and Chungbuk. Only three areas?Ulsan, Daegu, and Sejong?showed indices below the baseline.

Although the government is conducting pre-subscription for apartments in the metropolitan area and has declared that "house prices will stabilize soon," the market is moving in the opposite direction. A Korea Real Estate Board official explained, "The buying demand for apartments is continuously strengthening not only in the metropolitan area but also in other regions."

As buying sentiment expands, house prices continue their high-flying trend. Recently, the pace of apartment price increases in regions outside the metropolitan area is accelerating as much as in Seoul and its surroundings. According to Korea Real Estate Board statistics, apartment prices in eight provinces excluding Gyeonggi have increased over the past four weeks from 0.16% → 0.18% → 0.20% → 0.21% → 0.23%, and the rise rate in the five major metropolitan cities excluding Incheon jumped from 0.17% in mid-last month to 0.21% this week.

Among the regional metropolitan cities, Busan’s (0.28%) upward trend is notable. It has been rising for 61 consecutive weeks since June last year, with the recent increase rate growing larger. Particularly, Haeundae-gu showed a remarkable price surge of 0.50% this week. A Korea Real Estate Board official explained, "The semi-new and new apartment complexes in the well-located Haeundae-gu’s U-dong and Jwa-dong are driving up sales prices."

Apartment complexes in the Dongan-gu area of Anyang City Photo by Yonhap News

Other regional metropolitan cities such as Daejeon, Gwangju, and Ulsan, as well as provincial areas, are also seeing significant increases. Chungbuk’s apartment price growth rate rose from 0.30% to 0.34%, marking the highest in one year and two months, and except for Gyeongnam and Jeju, Gangwon, Jeonbuk, and Gyeongbuk all maintained or expanded their growth rates. Jeju’s slight pause is interpreted as a base effect, so it is fair to say that nationwide house prices are in a 'bull market.'

The reason why even regional house prices continue to soar is that expectations are reflected that areas less risen than the metropolitan area will rise significantly in the future. According to real estate information company Economy Man Lab, the number of apartment purchases by Seoul residents in other regions from January to June this year reached 32,420, setting a record high. Despite the government strengthening real estate regulations nationwide and expanding actual transaction investigations, 'expedition investments' have rather increased.

Seoul residents’ expedition investments were most frequent in Gyeonggi and Incheon, but significant numbers were also recorded in Gangwon (1,647 cases), Chungnam (1,489 cases), Chungbuk (1,128 cases), and Jeonbuk (1,058 cases). Industry insiders say that investments targeting mid-to-low priced or small apartments in regions with weaker regulations have greatly increased, aiming for short-term capital gains. An industry expert predicted, "Since buying sentiment is not subsiding, house prices in both the metropolitan area and other regions are expected to maintain an upward trend at least until early next year."

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