Average Nationwide Apartment Sale Price Exceeded 17 Million KRW per 3.3㎡ in January

[Asia Economy Reporter Cha Wanyong] The average apartment sale price nationwide in January has surpassed 17 million KRW per 3.3㎡. In particular, it has risen by more than 2 million KRW per 3.3㎡ over the past year, increasing the financial burden on ordinary citizens trying to purchase their own homes.

According to Real Estate R114 on the 1st, the average apartment sale price nationwide in January this year was 17.53 million KRW per 3.3㎡. This is a sharp increase of over 15% compared to last year (annual average 15.22 million KRW), when the average sale price first exceeded 15 million KRW since the survey began.

By region, Gyeonggi Province showed a significant rise of about 71%, from 15.74 million KRW last year to 26.91 million KRW in January. Gyeongnam (15.35 million KRW), Gyeongbuk (14.84 million KRW), and Chungbuk (10.95 million KRW) also exceeded last year’s sale prices from the beginning of the year.

Chungnam and Jeonbuk saw slight declines but maintained similar levels in the 10 million KRW range this year, following their first breakthrough of the 10 million KRW mark last year. On the other hand, Daegu, Incheon, and Jeju decreased by 890,000 KRW, 1.15 million KRW, and 9.28 million KRW respectively. Seoul, Busan, and six other regions did not have any supply in January, so their sale prices were not recorded.

Industry experts expect the steep rise in sale prices to continue for the time being, as construction costs steadily increase.

In fact, the Ministry of Land, Infrastructure and Transport has decided to raise the upper limit of the basic construction cost by 2.05%, effective from the 1st of next month, considering price changes in major construction materials such as rebar and ready-mixed concrete, as well as labor costs. Accordingly, the upper limit of construction costs per 1㎡ (for buildings between 16 and 25 floors, with exclusive area between 60 and 85㎡) will increase from 1,904,000 KRW, announced last September, to 1,943,000 KRW.

Some argue that while the upward trend continues, variables in sale prices will play a more significant role in the subscription market.

Due to difficulties in securing safety margins during the housing price adjustment period and increased financial burdens from high interest rates, buyers are placing greater importance on price competitiveness.

According to Real Estate R114, among the top 10 complexes nationwide with the highest first-priority subscription competition rates last year, seven (including two public sale complexes) were subject to the sale price ceiling system.

Kwon Il, head of the research team at Real Estate Info, said, “Even if suppliers want to set sale prices at a low level considering the difficult market conditions, the large increases in raw material costs, interest rates, and labor costs inevitably force sale prices to rise. If the real estate market recovers and consumer sentiment improves, the upward trend in sale prices could become even steeper.”