Apartment Prices in Non-Regulated Zones 'Soar'... Double-Digit Increases in Gwacheon and Seongdong, Seoul

Gwacheon City and Seongdong-gu See Apartment Prices Rise Over 10%
Non-regulated Areas Like Mapo, Yangcheon, and Gangdong Also Show Strong Growth
Experts: "High Likelihood of Expanding Regulated Zones"

Apartment prices in the Seoul metropolitan area, particularly in non-regulated zones, are experiencing a sharp upward trend. Despite the government's announcement of supply measures, the rate of increase has accelerated, leading to growing speculation that additional areas will inevitably be designated as regulated zones soon.

According to the Korea Real Estate Board on September 28, as of the fourth week of September (based on data from the 22nd), the areas where apartment prices have risen by more than 10% this year are Songpa-gu (13.4%), Seongdong-gu (11.2%), Seocho-gu (10.6%), and Gangnam-gu (10.5%) in Seoul, as well as Gwacheon City in Gyeonggi Province (12.2%). Among these, Gwacheon City and Seongdong-gu are non-regulated zones that have been excluded from regulated area designation.

Real transaction notice at a real estate agency in Mapo-gu, Seoul last June. Photo by Dongju Yoon

This year, the apartment price increase rate in Gwacheon City (12.2%) was 2.7 times higher than during the same period last year (4.5%). Notably, even after the government's September 7 housing supply policy announcement, the weekly growth rate continued to expand from 0.16% to 0.19% and then to 0.23%. Seongdong-gu also maintained its upward trend, with this year's increase rate (11.2%) surpassing last year's (8.3%). The weekly apartment price growth in Seongdong-gu also accelerated for five consecutive weeks after the third week of August, jumping from 0.15% to as high as 0.59%.

This trend has also been observed in other non-regulated zones, including Bundang-gu in Seongnam City and Mapo-gu, Yangcheon-gu, Gangdong-gu, and Gwangjin-gu in Seoul. Bundang-gu's apartment prices have surged by 8.8% so far this year, which is 2.8 times higher than the same period last year (3.2%). Mapo-gu (8.6%), Yangcheon-gu (7.4%), Gangdong-gu (6.9%), and Gwangjin-gu (6.6%) have also significantly exceeded last year's growth rates.

Experts believe that the government is likely to designate these areas as regulated zones in the near future. Currently, there are four regulated zones: Gangnam-gu, Seocho-gu, Songpa-gu, and Yongsan-gu in Seoul. Once an area is designated as a regulated zone, the loan-to-value (LTV) ratio is limited to 40%, and owners of multiple homes are subject to higher acquisition and capital gains taxes. Additionally, to qualify for first-priority status in housing subscriptions, applicants must have been enrolled for more than two years.

Sangwoo Park, Minister of Land, Infrastructure and Transport, is conducting a joint briefing on March 19 at the Government Complex Seoul in Jongno-gu, Seoul, regarding measures to stabilize the housing market, including real estate regulations, finance, and speculative transactions. The briefing was attended by Sehoon Oh, Mayor of Seoul, Beomseok Kim, Vice Minister of Strategy and Finance, and Soyoung Kim, Vice Chairman of the Financial Services Commission. Photo by Yongjun Cho

Nam Hyukwoo, a researcher at Woori Bank's Real Estate Research Institute, stated, "As the upward trend is spreading beyond specific areas, the government may consider expanding the regulated zones as a short-term response. It is highly likely that multiple areas will be designated simultaneously."