Seoul Home Prices Surge as Listings from Multiple Homeowners Dwindle... Largest Rise in 16 Weeks

Seoul Apartment Prices Rise 0.31% from Last Week
Seodaemun-gu Sees Largest Increase in 13 Years
Upward Trend Extends Beyond Gangnam and Songpa to Gwanak and Gangseo

This week, apartment prices in Seoul rose by 0.31% compared to the previous week, marking the largest increase in 16 weeks. Notably, Seodaemun-gu recorded its highest growth rate in about 13 years, highlighting a sharp rise centered on mid- to low-priced apartments in Seoul. Analysts attribute the surge in housing prices, especially in areas with a high concentration of mid- to low-priced apartments, to a market shift toward end users due to the impact of a tight lease market.

According to the weekly apartment price trend data released by Korea Real Estate Board on May 21, the rate of increase in Seoul apartment sale prices was 0.31%, up from 0.28% the previous week. This marks the highest increase in 16 weeks, since the fourth week of January (0.31%), when President Lee Jaemyung announced the end of the temporary suspension of the heavy capital gains tax for owners of multiple homes. The Real Estate Board explained, "As a wait-and-see approach among buyers intensifies, transactions have slowed in some areas, while demand is concentrated in complexes pushing for reconstruction and those with favorable living conditions, leading to an overall rise in Seoul as more contracts are signed at higher prices."

A view of apartments from Lotte World Tower in Songpa-gu, Seoul. Photo by Yonhap News

In the third week of this month, all 25 autonomous districts in Seoul saw apartment sale prices rise for the second consecutive week. Gangnam-gu, which had experienced 11 consecutive weeks of declines since late February but rebounded in the second week of this month, posted a 0.20% increase in the third week, expanding its upward trend. Songpa-gu recorded a 0.38% rise, its highest level in 25 weeks since the fourth week of November last year (0.39%). Seocho-gu climbed by 0.26%, a steeper increase than the previous week (0.17%).

The upward trend was particularly notable in areas with a high concentration of mid- to low-priced apartments. Seongbuk-gu, which set an all-time high of 0.54% in the second week, saw its increase slow slightly to 0.49% in the third week, but it still posted the highest rate among all districts. Seodaemun-gu rose by 0.46% compared to the previous week, marking the steepest increase in about 13 years since April 8, 2013 (0.68%). Gwanak-gu climbed by 0.45%, more than double the previous week's increase (0.20%). Additionally, sharp price rises were observed in Dobong (from 0.24% to 0.37%), Gangbuk (from 0.33% to 0.45%), and Gangseo (from 0.39% to 0.43%).

Experts say that as the temporary suspension of the heavy capital gains tax for owners of multiple homes has ended and urgent listings have been absorbed, demand from end users is continuing to push prices higher. Nam Hyukwoo, a real estate researcher at Woori Bank, noted, "Overall listings have decreased as properties from owners of multiple homes who failed to sell before the end of the tax break have disappeared. Especially in outlying areas, demand from single-person households and newlyweds continues to flow in due to relatively affordable prices."

Some analysts point out that, although the government has allowed “leaseback” sales for non-resident single-home owners and owners of multiple homes, the impact on lowering prices will likely be limited. Yoon Sumin, real estate expert at NH Nonghyup Bank, stated, "Unlike before May 9, when there was pressure to dispose of properties before the capital gains tax break ended, there is now little incentive for owners to rush their properties onto the market. Without any additional temporary measures requiring sale within a set period, leaseback sales are unlikely to have much effect in bringing down prices."

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