[Home Tech] Seoul Apartments: Change in Structure, Not Just Price

Rising Entry Barriers for Jeonse in Gangnam

Emergence of Seongdong, Yangcheon, and Yeongdeungpo as New Hotspots

Market Dynamics Shift Away from Following Gangnam

Editor's NoteMore than 70% of household assets in Korea are tied up in real estate. For us, a home is our most important asset, as well as the closest and most comfortable place. While living with so much invested in our homes, we provide the information needed to buy and sell properties. The Asia Business Daily publishes [Jiptech] every three weeks in collaboration with Hyosun Kim, Chief Real Estate Expert at KB Kookmin Bank, to deliver the knowledge you need.

Whenever the topic of Seoul apartments comes up, people are always interested in prices. However, if we look at the trends from 2021 through 2026, what is more important in the current Seoul market than price is the change in the market structure itself.

In the past, there was a widely accepted idea that when prices rose in Gangnam, all of Seoul would follow. But that is no longer the case. Over the past five years, the areas with the highest price increases were not in Gangnam, but in districts like Seongdong, Yangcheon, and Yeongdeungpo. These areas have seen increases of more than 50% to 80%, rapidly rising as new top-tier regions rivaling Gangnam. Meanwhile, districts such as Jongno, Geumcheon, and Eunpyeong did not even reach the average price increase for Seoul. This shows that market trends are now completely different depending on the area, even within Seoul itself.

The same goes for transaction volumes. As of the first quarter of 2026, transaction volumes in the outer districts have increased by nearly 60% to 100% compared to the previous year, while Gangnam and Seocho have seen their volumes drop to less than half. Unlike in the past, where Gangnam would move first and the outskirts would follow, demand is now shifting to areas where capital entry is relatively feasible.

Signs of structural realignment are also emerging in the jeonse leasing market. The jeonse price ratio, which measures the ratio of jeonse (long-term lease) prices to sales prices, has fallen in all 25 districts of Seoul. This is not because jeonse prices have dropped, but because sales prices have risen much faster than jeonse prices.

Areas like Gangnam, where the gap between sales and jeonse prices has widened significantly, are rapidly becoming markets centered on investment demand. In contrast, some outer districts of Seoul, where sales and jeonse prices have moved more closely together, still maintain a character focused on actual residence.

The difference in entry barriers between Gangnam and the outer districts has become even more pronounced. The gap between sales and jeonse prices in Gangnam District is about 1.6 billion won, and about 1.5 billion won in Seocho District. In contrast, the outer districts show a difference of around 200 million to 300 million won. Even within Seoul, the amount of initial capital required to purchase an apartment in the same area after living there on a jeonse lease can differ by more than seven times. As a result, highly sought-after areas like Gangnam are being reorganized into markets dominated by wealthy individuals with substantial cash assets. Meanwhile, actual homebuyers with limited funds are increasingly shifting to other regions.

The widening price gap has also brought changes to rental yields. In outer districts where sales prices have not risen significantly, rental yields are in the 2% range, while in Gangnam, they are barely above 1%. The problem is that rental yields in most areas of Seoul are currently lower than bank deposit interest rates. In other words, the current Seoul apartment market is not focused on monthly rental income, but is instead a capital gains market driven by expectations of future price increases.

Ultimately, it has become difficult to view all 25 districts of Seoul as a single, unified market. The city is fragmenting into core areas with concentrated capital like Gangnam, rapidly rising new top-tier districts, stable regions centered on actual residence, and outer absorption-type markets where transactions are active but price increases are limited.

The current Seoul real estate market is neither a typical bull nor bear market. It is a phase of market restructuring. If you only look at price fluctuations, you may miss the long-term trends. Going forward, what matters is understanding what kind of capital is flowing into which areas, and having the ability to read that structure.

Hyosun Kim, Chief Real Estate Expert, KB Kookmin Bank Star Advisory Group

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