Transactions for Apartments Under 600 Million Won in Seoul Nearly Disappear... Less Than 2 Out of 10 Units [Real Estate AtoZ]

Jiptos Analyzes Actual Transaction Prices in Seoul Over the Past Decade
Ultra-High-Priced Apartments Over 1.5 Billion Won Near 30%

In Seoul, apartments priced at 600 million won or less are rapidly disappearing. Just ten years ago, these accounted for eight out of every ten transactions, but now, they make up less than two out of ten. In contrast, the share of ultra-high-priced apartments exceeding 1.5 billion won has surged to nearly 30%, completely shifting the market's center of gravity. As a result, it has become increasingly difficult for young people and newlyweds to find their first homes in Seoul.

According to an analysis by real estate brokerage firm Jiptos of actual transaction prices for Seoul apartments reported from 2015 to September 17 of this year, the proportion of apartment transactions priced at 600 million won or less plummeted from 80.5% in 2015 to 15.8% this year.

During the same period, the proportion of apartments priced over 1.5 billion won soared from 1.3% to 27.3%. The share of apartments in the 900 million to 1.5 billion won range also increased sixfold, from 5.6% to 33.3%.

A real estate agency in Gangnam, Seoul has flyers for properties for sale and jeonse rental listings posted. Photo by Kang Jinhyung

Looking at apartments with an exclusive area of 50 square meters or more, which are mainly sought after by households of two or more people, 78% of transactions in 2015 were for units priced at 600 million won or less. This figure has shrunk to just 9.2% this year.

In particular, in the three Gangnam districts-Gangnam, Seocho, and Songpa-as well as in the Han River belt areas such as Mapo, Yongsan, and Seongdong, the share of apartment transactions priced at 600 million won or less was found to be below 1%. As recently as 2015, in Seongdong District, eight out of ten transactions for apartments of 50 square meters or more were for units priced at 600 million won or less.

The situation is not much different in other districts. In Dongjak (1.1%), Yeongdeungpo (1.2%), Dongdaemun (5.0%), and a total of 13 districts, the proportion of apartments priced at 600 million won or less was below 5%.

The only districts where the proportion of apartment transactions at 600 million won or less exceeds 30% are a few on the outskirts of Seoul, including Dobong (60.3%), Geumcheon (50.5%), Gangbuk (34.7%), Nowon (32.7%), and Jungnang (32.6%).

This shift has dealt a direct blow to housing stability measures for low-income residents and young people. The Bogeumjari Loan, a long-term fixed-rate mortgage product, is only available for homes priced at 600 million won or less. However, as the supply of such properties has dwindled, it has become virtually impossible to utilize this program.

Lee Jaeyoon, CEO of Jiptos, stated, "This means that the minimum foothold for young people to purchase apartments in Seoul is disappearing," and added, "We need to consider ways to supply housing that young people and newlyweds can realistically access."