The Hot Real Estate Market This Year... Seoul's Average House Price Surpasses 1.2 Billion KRW, Uiwang Up 38% in One Year

A Look Back at the 2021 Real Estate Market by Numbers
Recent Stabilization Seen but Record-High Price Surge Already Occurred
Housing Prices Soar in Uiwang, Siheung, and Anyang Amid Transportation Benefits
Triple Pricing in Jeonse Market Due to Contract Renewal Request System
'Lotto Sales' Continue with Complexes Exceeding 100:1 Ratios

Although housing prices have stabilized toward the end of the year, the overall real estate market this year was hotter than ever. The average nationwide apartment price increase was 13.25%, nearly double last year's 7.04%, with Gyeonggi-do, Incheon, and Jeju seeing increases well over 20%. The average apartment sale price in Seoul surpassed 1.2 billion KRW, doubling compared to May 2017 (607.08 million KRW), when the Moon Jae-in administration began. The subscription market was also excessively overheated, with complexes exceeding competition rates of 100 to 1. This year, we review the real estate market through the 'numbers' from sales, jeonse (long-term lease), and pre-sale transactions.

38.56%

According to the weekly apartment price trends compiled by the Korea Real Estate Board, the area with the highest increase in apartment sale prices among cities, counties, and districts nationwide in the Year of the Ox was Uiwang-si in Gyeonggi-do, with an average rise of 38.56%. This surge was driven by demand following the decision to add Indeogwon Station, located on the border of Uiwang, Anyang, and Gwacheon, as an additional stop on the GTX (Great Train Express) C line in the metropolitan area. The second highest increase was in Siheung-si, also influenced by transportation benefits, rising 37.26% due to the Sinansan Line and Wolgot-Pangyo Line effects. Incheon Yeonsu-gu (33.11%), Ansan-si (32.49%), and Osan-si (30.22%) also saw prices soar over 30%. In the provinces, Jeju Island's housing prices were the hottest, recording a 20.13% increase amid growing interest in remote work due to the prolonged COVID-19 pandemic and an increase in tourists.

[Image source=Yonhap News]

3

"Three prices for the same complex and same area." This is a clear example of the disruption in the jeonse and monthly rent market caused by the implementation of the three lease laws last year. This year, apartment jeonse prices rose 9.13%, steeper than last year's 7.55%. Although the increase has slowed recently as the market entered the off-season, jeonse and monthly rent prices nationwide have already soared to unaffordable levels in most regions. Particularly in this year's rental market, a 'triple price' phenomenon emerged due to the contract renewal request system and the rent ceiling system. Contracts were divided into renewal contracts with a 5% limit on deposit increases, new contracts without such limits, and re-contracts without exercising the renewal right, resulting in three different jeonse prices within the same complex. This is a typical market distortion caused by regulation. Above all, there is concern that when the units with deposit caps of 5% or less become available for new contracts after August next year, landlords will preemptively raise prices for four years, considering the tenant's future exercise of the contract renewal right.

Acro River Park, Banpo-dong, Seocho-gu, Seoul

12,000,000,000

This year, record-breaking high-price transactions continued in Seoul's apartment sales market. The highest-priced apartment is 'Park Hannam' in Hannam-dong, Yongsan-gu, Seoul. On the 13th of this month, a 268㎡ (exclusive area) unit was sold for 12 billion KRW, causing a seismic shift in Seoul's ultra-high-end apartment market. 'PH129' in Cheongdam-dong, Gangnam-gu, also attracted attention with 273㎡ units sold for 11.5 billion KRW and 10 billion KRW in March and July, respectively. Among apartments around 84㎡, known as the standard size, the highest price was at 'Acro River Park' in Banpo-dong, Seocho-gu, with a contract signed last month for 4.5 billion KRW. This is nearly 1.5 billion KRW higher than the 3.03 billion KRW price at the beginning of the year. When converted to price per 3.3㎡ based on supply area, it exceeds 130 million KRW, indicating that 100 million KRW per 3.3㎡ has become common in Gangnam. Despite the complete ban on mortgage loans for homes priced over 1.5 billion KRW and the sharp increase in holding taxes such as comprehensive real estate tax, the ultra-high-end apartment market remains hot. The KB Leading Apartment 50 Index, which reflects the market capitalization changes of the 50 most expensive apartment complexes in Korea, rose 16.68% this year.

809.1 to 1

The subscription market was also hot. Due to the price gap caused by the pre-sale price ceiling system, winning a subscription became widely recognized as a 'lottery.' According to an analysis by real estate research firm Real Today of Korea Real Estate Board's subscription home data, 2,926,313 people applied for 146,579 apartments nationwide this year, recording an average competition rate of 19.96 to 1. Sejong City had the most intense competition with an average rate of 195.3 to 1. In Seoul, 282,896 applicants competed for 1,721 units, resulting in an average competition rate of 164.3 to 1, the highest since data collection began in 2002. Compared to last year's 88.8 to 1, the competition rate roughly doubled. Among individual complexes, 'Dieta Prestige Dongtan Station' in Dongtan New Town, Hwaseong, Gyeonggi-do, recorded the highest competition rate this year, soaring to 809.08 to 1 with 244,343 applicants for 302 general supply units.

1,249,780,000

As housing prices soared to unprecedented levels, the average apartment sale price in Seoul exceeded 1.2 billion KRW. According to KB Kookmin Bank data, the average apartment sale price in Seoul was 607.08 million KRW in May 2017, when the current government took office, but rose to 1.24978 billion KRW in December this year, more than doubling in four and a half years. This means it has become much harder for ordinary citizens to own a home. The price gap within Seoul also widened by region. The average apartment sale price in the 11 districts south of the Han River rose by 754.71 million KRW from 733.47 million KRW in May 2017 to 1.48818 billion KRW this month, approaching the 'loan prohibition line' of 1.5 billion KRW. Meanwhile, prices in the 14 districts north of the Han River increased by only 533.08 million KRW to 991.72 million KRW. The gap, which was 274.83 million KRW at the start of the Moon Jae-in administration, widened to 496.46 million KRW this year.

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