[Initial Insight] Learning 'Reasonable Seoul Housing Prices' from Jeong Yak-yong

During Exile, Earnest Advice to Two Sons
"Increase Wealth in the Countryside, Then Live in Hanyang"

Now Unimaginable, but This Is the House Price Level Ordinary People Desire

Seoul housing prices have not only been expensive recently. According to the book titled "We Are a Nation of Speculators," based on the Annals of the Joseon Dynasty, there was no business in front of housing prices in Hanyang over 300 years ago. The yangban (aristocrats) flocked to Hanyang to study for the civil service exams, while commoners came seeking jobs.

During King Jeongjo's reign, Yoon Tae-yeon, the captain of Eoyeongcheong guarding the king, bought a house with 10 rooms and remodeled it into 30 smaller rooms to rent out, practicing what could be called "jjokbang real estate investment." It was common for students of Sungkyunkwan to pair up and rent a small room together. Even Jeong Yak-yong, a representative of benevolent governance, promised in a letter to his two sons during his exile that "I will make sure you live within 10 ri (4 km) of Hanyang." This shows that the obsession with living "in Seoul" has been a desire continuing for centuries.

In the Seoul real estate market, dominated by psychology, the supply and demand graph is distorted. Despite the government tightening loans and Seoul apartment listings piling up, homeowners are raising their asking prices. On real estate communities, posts like "When you search online and contact real estate offices, you often hear 'You can't buy at that price anymore'" stand out. Even though the move-in for Olympic Park Foret One, the largest reconstruction complex since the founding of Dangun, begins at the end of this month, Seoul's jeonse (long-term lease) prices show no signs of falling.

Whether for sale or jeonse, Seoul apartment owners hold firm on prices because they are confident that housing prices will rise again. The forecast that the number of Seoul apartment move-ins in 2026 will drop to a quarter of this year's volume has instilled an undefeated belief. The scarcity of new apartments drives record-high prices.

The "high in the first half, low in the second half" pattern has also been learned. Since the current government took office, policy loans like special housing loans and newborn special loans have been introduced every early year. Funds are released in the first half of each year, contributing to rising housing prices, but prices tend to stagnate in the second half. If a similar trend continues next year, there is no immediate reason to sell. Real estate experts recommend, "End users should buy before prices rise again." At this point, it can be seen as only a matter of time before Seoul housing prices fluctuate again.

To control housing prices, the only option is to build more houses. The Ministry of Land, Infrastructure and Transport is announcing measures almost daily, such as reconstruction of first-generation new towns and Greenbelt deregulation. To avoid these becoming empty promises, increasing their feasibility is key. However, the National Assembly Budget Office has expressed doubts about whether the first-generation new towns will proceed as scheduled. From 2027, relocation demand of 20,000 to 30,000 households is expected from reconstruction pilot districts, but absorbing this demand through reconstruction of permanent rental housing, as planned by the Ministry, is considered unrealistic. They pointed out the lack of large units, the long time required, and the fact that current rental housing residents have nowhere to go.

The plan to build 50,000 households in the metropolitan area by releasing the Greenbelt also requires detailed land compensation negotiation plans. Compensation procedures and land appraisal plans must be released quickly to realize the goal of lowering housing prices with "2029 sales - 2031 move-in." Among the third-generation new towns announced four years ago, some still have unresolved compensation negotiations. The more concrete the policy, the greater its impact on market prices.

Jeong Yak-yong told his two sons, "If you cannot deeply enter the heart of Hanyang, it is not too late to live temporarily in the suburbs, maintain your livelihood by planting fruits and vegetables, and then enter after increasing your wealth." Although this has become an unimaginable idea over 300 years later, the current level of Seoul housing prices might still be just about this much?something ordinary people can live in through 'no-oreok' (hard work).