Seoul Apartment Prices Surge... 'Balloon Effect' Drives Sharp Rise in Paju and Ulsan Too

Minister of Land, Infrastructure and Transport Kim Hyun-mi is attending the 'Real Estate Inspection Ministers' Meeting' held at the Government Seoul Office in Jongno-gu, Seoul on the 2nd. Photo by Kang Jin-hyung aymsdream@

원본보기 아이콘

[Asia Economy Reporter Moon Jiwon] The rise in apartment sale prices in Seoul and the metropolitan area has further expanded. Although the government is striving to stabilize housing prices, there is a growing trend of price increases centered on mid-to-low-priced complexes in Seoul and non-regulated areas such as Paju.

According to the weekly apartment price trend data for the 5th week of November released by the Korea Real Estate Board on the 3rd, as of the 30th of last month, apartment sale prices in Seoul rose by 0.03%, an increase from the previous week’s 0.02%.

The apartment sale price increase rate in Seoul maintained 0.01% for nine weeks from August to October, then slightly rose to 0.02% in November for four consecutive weeks, and this time increased a bit more to 0.03%.

The Korea Real Estate Board analyzed, "Due to the impact of comprehensive real estate tax imposition and the strengthening of the Debt Service Ratio (DSR) on credit loans, high-priced complexes are showing a wait-and-see trend, while mid-to-low-priced complexes and those with favorable reconstruction prospects are seeing price increases."

Gangnam-gu, which had fluctuated between negative and flat apartment sale prices until last month, recorded a 0.04% increase this week. Although the Gangnam area had been experiencing a slowdown in housing prices due to successive government regulations, the price increase in Seocho-gu and Songpa-gu (0.03%) has recently been expanding.

Additionally, Dongdaemun-gu (0.04%) saw price increases due to the development benefits around Cheongnyangni Station, and Nowon-gu (0.04%) experienced price rises mainly in Sanggye-dong station area complexes and Junggye-dong. The upward trend was also clear in mid-to-low-priced complexes in Gangbuk-gu (0.03%), Gwanak-gu (0.04%), and Gangseo-gu (0.04%).

In Gyeonggi-do, the apartment sale price increase rate also expanded from 0.22% to 0.24%.

Gimpo-si (0.39%), designated as a regulated area on the 20th of last month, continued its upward trend mainly in newly built complexes near stations, but the overall increase narrowed due to weakened buying demand.

On the other hand, Paju-si (1.38%), which avoided regulation, saw a larger increase than the previous week (1.06%) due to the 'balloon effect.'

In Ulsan, where buying demand has concentrated since Haeundae, Suyeong, Dongnae, Yeonje, and Nam-gu in Busan were designated as regulated areas, the apartment sale price increase rate grew from 0.65% to 0.83%. Nam-gu (1.36%) rose relatively more, and Buk-gu (0.62%) and Jung-gu (0.61%) also saw significant increases.

A commercial real estate agency in Songpa-gu, Seoul (Photo by Yonhap News)

원본보기 아이콘

In the jeonse (long-term lease) market, the price increase rate slightly decreased but still maintained a high rise.

Seoul’s apartment jeonse prices rose by 0.15%, the same as the previous week. The upward trend continued mainly in areas with good school districts, transportation conditions, or influenced by relocation demand.

Jeonse prices in the four Gangnam districts?Songpa-gu (0.23%), Gangdong-gu (0.22%), Gangnam-gu (0.21%), and Seocho-gu (0.20%)?increased significantly. Mapo-gu (0.20%) saw rises mainly in the Gongdeok-dong station area close to workplaces and older complexes in Seongsan-dong, and Yongsan-gu (0.18%) experienced increases mainly in Ichon-dong.

In Gyeonggi-do, Gimpo-si (0.60%) saw jeonse prices soar mainly in newly built station-area complexes such as Hangang New Town, where jeonse supply is insufficient. Hanam-si (0.51%) rose mainly in Misa Riverside New Town, which has favorable living conditions, and Seongnam Bundang-gu (0.39%) increased mainly in station-area complexes such as Gumi, Yatap, and Imae-dong.

In the provinces, the jeonse market showed even more instability.

Ulsan rose 0.88% this week, an increase from 0.75% the previous week. Busan (0.47%) also saw significant increases in areas such as Gijang-gun (0.94%), Busanjin-gu (0.77%), and Nam-gu (0.72%).

Sejong, where housing prices have surged due to the National Assembly relocation issue, also showed an unstable atmosphere as the jeonse price increase rate expanded from 1.36% to 1.48%. The Korea Real Estate Board explained, "the increase rate expanded mainly in major areas within the Happy City such as Goun, Dodam, and Saerom-dong, as well as in older complexes in Jochiwon-eup."

© The Asia Business Daily(www.asiae.co.kr). All rights reserved.