Seoul Apartment Price Increase Rate Highest in 1 Year and 6 Months... Jeonse Price Rise Also Expands

Korea Real Estate Board June 2nd Week Apartment Price Trends
Seoul Sale and Jeonse Price Increase Both Expand
Incheon, Gyeonggi, and Other Seoul Metropolitan Area Housing Prices Jump
Seocho-gu Jeonse Prices Surge...Housing Instability Concerns

Apartment complexes in the Gangnam-gu area as seen from the Daemosan Observatory in Seoul [Image source=Yonhap News]

[Asia Economy Reporter Moon Jiwon] The rate of increase in apartment prices in Seoul expanded again this week, reaching the highest level in about 1 year and 6 months since June 2019. As the holding tax imposition date passed on June 1, the overall supply of properties decreased, and some reconstruction-promoting complexes saw record-high prices, leading to a steep rise in prices. In particular, concerns are emerging that housing price instability is worsening as jeonse (long-term lease) prices have also risen significantly, centered on Seocho-gu, where relocation due to redevelopment projects has become full-scale.

According to the weekly apartment price trend for the second week of June announced by the Korea Real Estate Board on the 17th, as of the 14th, apartment prices in Seoul rose by 0.12%, expanding the increase compared to the previous week (0.11%). The Real Estate Board explained, "Overall, as the supply of properties decreased, the increase expanded compared to last week due to record-high transactions occurring in some areas and reconstruction complexes."

Due to the impact of the 2·4 measures, the apartment price increase rate in Seoul fell from 0.10% in early February to 0.05% at the end of March, but it has been increasing again since the Seoul mayoral by-election in April. At the end of last month, it recorded a 0.11% increase rate for the first time in about 11 months. This week's increase rate of 0.12% is the highest in about 1 year and 6 months since the third week of December 2019.

In Seoul, Nowon-gu (0.25%), where expectations for reconstruction are high, saw the largest increase mainly in older buildings in Junggye and Gongneung-dong. Mapo-gu (0.15%) and Dobong-gu (0.13%) also continued their upward trend in areas near subway stations and older buildings. South of the Han River, Seocho-gu (0.19%) and Gangdong-gu (0.14%) saw a larger increase compared to the previous week. Songpa-gu (0.16%) and Gangnam-gu (0.15%) also maintained relatively high growth rates, while other districts such as Dongjak-gu (0.15%) and Gwanak-gu (0.12%) showed similar or steeper upward trends compared to the previous week.

In Incheon, the apartment price increase rate expanded from 0.46% last week to 0.49% this week. Apartment prices in Gyeonggi Province rose by 0.43% this week, also showing a larger increase compared to the previous week (0.39%). Anyang Dongan-gu (0.99%), which has expectations for additional stations on the metropolitan area express railway (GTX)-C line, rose sharply, and cities with transportation improvement expectations such as Siheung (0.95%) and Danwon-gu in Ansan (0.91%) also continued their upward trend as buying demand concentrated.

However, in Sejong City, apartment prices fell by 0.07%, widening the decline compared to the previous week (-0.04%). The Real Estate Board explained, "Due to fatigue from the previous rapid price surge, buying demand decreased and supply accumulated, leading to an expanded decline compared to last week."

View of Jamsil 5th Complex Jugong Apartment Complex in Seoul [Image source=Yonhap News]

Jeonse prices, which seemed to stabilize at the beginning of the year, are also gradually increasing their rate of rise. Seoul's apartment jeonse prices rose by 0.11% this week, expanding the increase compared to the previous week (0.08%). This marks the fourth consecutive week of expanding increases since the third week of May. Seocho-gu (0.56%) saw a significant rise in jeonse prices due to relocation demand from redevelopment projects such as Banpo 1, 2, and 4 districts, causing a shortage of available properties.

Additionally, Dongjak-gu (0.20%) saw a significant increase in jeonse prices mainly in Noryangjin and Heukseok-dong, affected by redevelopment relocation. Songpa-gu (0.15%), Gangdong-gu (0.14%), and Gangnam-gu (0.10%) also continued their upward trend. However, Yangcheon-gu (0.00%) and Geumcheon-gu (0.00%) maintained a stable trend.

In Gyeonggi Province, apartment jeonse prices slightly expanded from 0.17% last week to 0.18% this week. Siheung (0.54%), Dongducheon (0.48%), and Pyeongtaek (0.43%) saw significant increases. Sejong City (-0.09%→-0.08%) continued its jeonse price decline due to seasonal off-season and new housing supply effects.