Seoul, Continuous Increase Since June Last Year
Record High Cumulative Rise Rate in the Capital Area
[Asia Economy Reporter Jo Gang-wook] The upward trend in apartment sale prices in the Seoul area has continued for over a year, soaring to unprecedented heights. Jeonse prices have also broken records despite the full implementation of the Jeonse and monthly rent reporting system, the final piece of the three lease laws. The government's warning that this is a peak just before the level of the global financial crisis has proven to be unfounded.
According to the housing price time series from the Korea Real Estate Board on the 11th, apartment sale prices in Seoul have risen for 12 consecutive months from June last year to last month. Apartment prices in the entire metropolitan area, including Incheon and Gyeonggi Province, have also recorded monthly increases of over 1% up to May this year. Since the Real Estate Board began compiling related statistics in 2003, this is the first time in 18 years that metropolitan area apartment prices have risen more than 1% for five consecutive months. The cumulative increase during this period is 6.95%, the highest ever recorded.
The upward trend in housing prices has not slowed down this month either. According to the Real Estate Board's survey, the nationwide apartment price increase rate for the first week of June (as of the 7th) was 0.25%. Seoul rose by 0.11%, marking 53 consecutive weeks of increase. Gyeonggi Province expanded its increase rate to 0.39% from 0.36% the previous week, while Incheon remained steady at 0.46%.
The increase rate in housing prices shown by KB Kookmin Bank’s Liv Real Estate housing price time series is even steeper. From the beginning of this year to last month, apartment price increases were 6.66% in Seoul, 10.86% in Incheon, and 12.43% in Gyeonggi Province.
Seoul apartment jeonse prices rose at the highest rate in 16 weeks. This marks the 102nd consecutive week of increase since the first week of July 2019. In particular, Seocho-gu showed the highest increase rate since July 2018, influenced by relocation demand from the redevelopment complexes in Banpo-dong.
This trend differs from the “housing price peak theory” raised by Deputy Prime Minister and Minister of Strategy and Finance Hong Nam-ki at the early June meeting of related ministers reviewing the real estate market. Deputy Prime Minister Hong stated, "Based on real prices excluding inflation, apartment prices in Seoul are approaching the peak level before the adjustment caused by the 2008 global financial crisis."
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