Apartment Sale Price Increase Rate Steeper in Provinces than in Seoul

The rate of increase in apartment sale prices was found to be steeper in provinces than in Seoul. There were also clear differences in the rate of increase by region.

On the 28th, real estate market analysis firm Real Estate Info analyzed data from the Housing and Urban Guarantee Corporation (HUG) housing information portal and found that the nationwide apartment sale price per 3.3㎡ (exclusive area over 60㎡ and up to 85㎡) in December last year rose from 11,889,000 KRW in January 2020 to 15,335,000 KRW, an increase of about 28.9%.

During the same period, Seoul's price rose from 26,845,000 KRW to 30,356,000 KRW, a 13.1% increase, which was below the national average. Gwangju and Daegu increased by 14.7%, while Gyeonggi and Gyeongnam rose by 16.8% and 16.2% respectively, showing relatively lower increases in sale prices.

Gyeongbuk (21.6%), Incheon (23.0%), Jeonbuk (27.3%), Jeonnam (27.5%), Chungnam (29.5%), and Daejeon (29.7%) recorded increases in the 20% range, close to the average rate of increase. On the other hand, Chungbuk (38.8%), Gangwon (42.4%), Busan (51.5%), Jeju (69.9%), and Ulsan (77.1%) rose sharply, leading the upward trend in provincial sale prices.

The lower rate of increase in sale prices in Seoul and other metropolitan areas is interpreted as being due to the many new towns, housing sites, and speculative overheating zones subject to the price ceiling system. However, under the 1·3 real estate measures, all areas except the Gangnam 3 districts and Yongsan district in Seoul have avoided the application of the price ceiling system, so further price increases are expected.

Prices are also continuing to rise. The Ministry of Land, Infrastructure and Transport unusually raised the 'standard construction cost,' which was previously calculated twice a year, three times last year and additionally increased it by 2.05% in February this year compared to September last year.

A real estate expert said, "Considering recent price trends for construction materials and labor costs, it is impossible to lower sale prices," adding, "If sale prices do not reflect realistic price levels, problems such as poor finishing materials or, in the worst case, delays in move-in due to conflicts over construction costs may occur."