The Gap Between High-Price and Low-Price Apartments Widens Due to Preference for a Single Smart Home

[Asia Economy Reporter Kim Min-young] The polarization in both the nationwide apartment sales and jeonse markets has reached an all-time high. As the real estate market faces an extreme transaction freeze due to loan regulations, perceptions of peak housing prices, and interest rate hikes, the polarization between high-priced and low-priced housing is intensifying.

According to the monthly housing market trend time series statistics from KB Kookmin Bank on the 1st, the nationwide apartment 5-quintile ratio in January was 9.8 for sales and 7.7 for jeonse. This is the highest figure since the related monthly survey began in December 2008.

The 5-quintile ratio is calculated by dividing the average price of the top 20% (5th quintile) of houses by the average price of the bottom 20% (1st quintile) after sorting houses by price. It shows the price gap between high-priced and low-priced houses, and a higher ratio indicates more severe polarization. Nationwide, apartments in the top 20% are priced 9.8 times higher for sales and 7.7 times higher for jeonse than those in the bottom 20%.

Last month, the average price of apartments in the bottom 20% nationwide was 124.07 million KRW, down 0.84 million KRW from December last year. In contrast, the average price of apartments in the top 20% rose by 23.57 million KRW to 1.21332 billion KRW, surpassing 1.2 billion KRW for the first time. During the same period, the jeonse price for apartments in the bottom 20% nationwide fell by 0.04 million KRW to 88.08 million KRW, while apartments in the top 20% saw an increase of 13.64 million KRW to 677.09 million KRW.

Recently, due to perceptions of peak housing prices, interest rate hikes, and the presidential election, the rate of increase in both sales and jeonse prices has slowed or declined in many regions, but ultra-high-priced apartments continue to rise in price, deepening polarization.

By region, the 5-quintile ratio increased compared to the previous month in all areas last month. The 5-quintile ratios in the five major provincial metropolitan cities (Daejeon, Daegu, Busan, Ulsan, Gwangju) and other provincial areas recorded 5.7 (5.71 to the second decimal place) and 6.9 respectively, marking the highest monthly figures since the survey began.

For jeonse as well, the 5-quintile ratios reached record highs (compared to the second decimal place) in △Seoul (4.0) △Incheon (4.1) △five major metropolitan cities (4.9) △other provincial areas (6.4).

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