Despite Loan and Interest Rate Regulations... Apartment Prices in the Seoul Metropolitan Area Rise 0.4% for 5 Consecutive Weeks

Korea Real Estate Board, Weekly Apartment Price Trends

[Asia Economy Reporter Kim Hyemin] Despite loan regulations and interest rate hikes, apartment prices in the Seoul metropolitan area recorded a 0.4% increase for five consecutive weeks. This marks the highest rise for nine consecutive weeks, with apartment sale prices in Seoul also maintaining a 0.2% increase for seven consecutive weeks. The shortage of jeonse (long-term lease) properties continued, sustaining the nationwide upward trend.

According to the Korea Real Estate Board on the 16th, as of the second week of September (13th), apartment sale prices in the Seoul metropolitan area rose by 0.4% compared to the previous week. This 0.4% increase was maintained for five consecutive weeks. This is the highest figure since the Real Estate Board began compiling weekly statistics in May 2012. Apartment prices in the metropolitan area have maintained the highest increase rate for nine consecutive weeks since mid-last month.

Seoul rose by 0.21% following the previous week. The continued shortage of listings and expectations of deregulation such as reconstruction boosted prices in major reconstruction complexes and mid-to-large sized complexes in the Gangnam area. In particular, mid-to-low priced apartments under 900 million KRW in the Gangbuk area have continued to rise as prices align. Gangseo-gu, centered around the Magok district, rose by 0.29%, and Nowon-gu, mainly small-to-medium sized apartments in Gongneung and Wolgye-dong, also rose by 0.29%, recording the highest increase rates.

Gyeonggi Province's increase slowed slightly from 0.51% last week to 0.49% this week but still maintained a 0.4% level increase. Notably, Osan-si (0.84%), Anseong-si (0.83%), and Hwaseong-si (0.82%) showed remarkable rises. Osan's prices increased mainly in undervalued complexes due to transportation benefits such as the extension of the Bundang Line. Anseong attracted demand due to transportation benefits including the extension of the Gyeonggang Line (Gwangju~Anseong), the Seoul Metropolitan Inland Line (Dongtan~Anseong~Cheongju Airport), and the Pyeongtaek-Bubal Line (Bubal~Anseong). Uiwang-si (0.69%) also reflected expectations as the stop at Uiwang Station on the GTX C Line was confirmed.

Incheon expanded its increase from 0.44% last week to 0.45% this week. Yeonsu (0.65%), Gyeyang (0.52%), and Bupyeong-gu (0.48%) continued their upward trend mainly in complexes with transportation and development benefits.

Excluding Incheon, the five major metropolitan cities increased by 0.2% compared to the previous week, expanding their rise. The eight provinces, excluding Gyeonggi, also saw an increase of 0.26%. Sejong fell for the eighth consecutive week (-0.01%) but the decline narrowed. Nationwide apartment sale prices slightly expanded their rise from 0.3% to 0.31%.

The rise in jeonse prices due to the jeonse shortage also continues. Apartment jeonse prices in the metropolitan area increased by 0.25% for four consecutive weeks. During the same period, Seoul showed a 0.17% increase. Gyeonggi's rise narrowed from 0.3% to 0.29%, but Incheon expanded its increase from 0.24% to 0.25%. The Real Estate Board stated, "While the shortage of jeonse listings in Seoul continues, prices are rising mainly in mid-to-low priced complexes in areas with reconstruction and relocation demand and good residential conditions." In Seoul, the upward trend continues in Dongjak-gu (0.22%) and Seocho-gu (0.16%) due to reconstruction relocation demand.

The five major metropolitan cities saw their increase narrow from 0.14% to 0.12%, while the eight provinces expanded their rise from 0.17% to 0.18%.