[One Month After 8·8 Measures] Seoul Apartments, Both Sale and Jeonse Prices Increased

Korea Real Estate Board 'Apartment Price Trends for the Second Week of September'
Seoul Apartment Listings Sell Out More Slowly
Record High Transactions in Some Reconstruction and New Complexes
Jeonse Price Increase Widens Ahead of Moving Season

One month after the announcement of the ‘8·8 Housing Supply Expansion Plan,’ the rise in Seoul housing prices has accelerated. Despite the government tightening bank loan regulations to curb housing prices, the rate at which listings are being sold has only slowed slightly. With the autumn moving season underway, the demand for jeonse (long-term lease) has increased, leading to a larger rise in Seoul apartment jeonse prices.

One Month After the 8·8 Plan: "Housing Prices Have Risen"

According to the ‘Apartment Price Trends for the Second Week of September (as of the 9th)’ released by the Korea Real Estate Board on the 12th, the apartment sales price index in Seoul rose by 0.23% compared to the previous week, continuing its upward trend for 25 consecutive weeks. The increase was slightly larger than the previous week’s 0.21%.

Seoul apartment prices jumped 0.32% in the second week of August, marking the highest increase in 5 years and 11 months. Although the rate of increase slowed for three consecutive weeks starting from the third week of August due to loan regulations and other factors, it expanded again this week.

The Korea Real Estate Board explained, "Although the pace of listings being sold has slowed due to recent changes in the loan environment and fatigue from rapid price increases, overall the upward trend has expanded as some record-high contracts were signed mainly in certain reconstruction complexes and preferred new construction areas within the region."

By district, Seocho-gu recorded the highest increase at 0.44%, mainly driven by quasi-new complexes in Seocho and Banpo-dong. Seongdong-gu followed with a 0.41% rise, led by preferred complexes in Geumho and Ha Wangsimni-dong. Other districts with notable increases included Songpa-gu (0.35%), Yongsan-gu (0.34%), Gwangjin-gu (0.34%), Gangnam-gu (0.31%), Mapo-gu (0.29%), and Yeongdeungpo-gu (0.25%).

The metropolitan area also continued its upward trend. Gyeonggi Province’s increase expanded from 0.10% to 0.13%, resulting in the overall metropolitan area rising from 0.14% to 0.15%. Incheon’s increase slowed from 0.13% to 0.10%.

Unlike the metropolitan area, apartment prices in provincial areas, where prices are falling, saw a reduced decline of 0.01% this week compared to -0.02% last week. Consequently, the nationwide apartment price increase expanded from 0.06% last week to 0.07% this week.

Jeonse Prices Also Rise with Moving Season

With the autumn moving season, the rise in jeonse prices has also accelerated. The metropolitan area (0.14% → 0.17%) and Seoul (0.15% → 0.17%) saw an increase in the rate of jeonse price growth. Seoul’s jeonse price rise has continued for 69 consecutive weeks.

Incheon’s increase slowed from 0.30% last week to 0.26%, but still recorded a relatively high rise. Gyeonggi Province’s increase expanded from 0.09% to 0.15%. Provincial areas remained flat at 0.00%. Nationwide, the jeonse price increase rose from 0.07% last week to 0.08% this week.

The Korea Real Estate Board explained, "Due to the autumn moving season, waiting demand has increased mainly in preferred areas such as those near subway stations, new constructions, and school districts. As a result of a shortage of listings, contracts have been steadily signed at higher prices, slightly expanding the overall rise in Seoul."

Kwon Young-sun, team leader at Shinhan Bank’s Real Estate Investment Advisory Center, explained, "Although loan regulations have tightened and Seoul apartment transaction volumes have decreased, record-high transactions have been made mainly for high-priced homes among buyers who can purchase without loans, which has contributed to the expanded rise." He added, "There is still no sign that Seoul apartment asking prices will fall," and analyzed, "The buying sentiment of ‘If you don’t buy now, you won’t be able to’ has not been broken."