Seoul 'Han River Belt' Apartment Prices Surpass Moon Administration Peak (Comprehensive) [Real Estate AtoZ]

11 Districts in Seoul Surpass Moon Administration Peaks
Record-High Transactions Centered on Han River Belt
Buying Demand Recovers Amid Multiple Factors:
Shortage of New Supply, Interest Rate Cuts, and Rising Jeonse Prices
Potential fo

Since the inauguration of the Lee Jaemyung administration, there has been a surge in regions surpassing the previous peaks recorded during the Moon Jaein administration (2017-2022). The trend of housing prices reaching new highs is spreading from Seoul to key areas in the metropolitan region and some provincial medium-sized cities. As the rise in housing prices becomes increasingly pronounced, there is growing speculation that the government will soon announce additional measures to curb the market.

Apartment buildings in downtown Seoul. Photo by Yonhap News.

According to an analysis of the apartment sales price index from the Korea Real Estate Board on October 9, eleven districts in Seoul have all exceeded their previous peaks set during the Moon administration. These districts are Gangnam, Seocho, Songpa, Yongsan, Seongdong, Mapo, Gwangjin, Yangcheon, Gangdong, Yeongdeungpo, and Dongjak. The sales price index reflects the rate of price change compared to a baseline, which is set at 100 as of March 31 of this year.

By district, Seongdong saw its index jump from the peak of 93.88 in January 2022 under the Moon administration to 110.26 in the fifth week of September this year, an increase of 17.45%. Songpa rose from 93.99 in January 2022 to the current 109.70, up 16.71%. Seocho climbed from its peak of 91.56 in August 2022 to 107.66, a 17.58% increase. Gangnam reached 107.05, up 13.83% from 94.04 in June 2022.

Yongsan increased from its June 2022 peak of 97.81 to 106.76, up 9.15%. Mapo rose from 101.29 in January 2022 to 108.06, a 6.68% increase. Gangdong (3.58%), Gwangjin (4.76%), Yangcheon (5.69%), Yeongdeungpo (2.43%), and Dongjak (1.44%) have also all surpassed their previous highs.

As a result, 10 out of the 11 districts adjacent to the Han River have surpassed their previous peaks. Gangseo is the only Han River-adjacent district that has not reached a new high; its current sales price index is 102.30, which is 7.9% lower than its previous peak of 111.09 recorded in January 2022.

The overall sales price index for Seoul stands at 104.47, just below the previous high of 104.63 (January 17, 2022) set during the Moon administration. The slower recovery in outlying districts such as Nowon, Dobong, Gangbuk (collectively known as "Nodogang"), and Geumcheon, Guro, Gwanak ("Geumgwanggu") is dragging down the average. In these areas, apartment prices remain more than 10% below their previous peaks.

After a brief pause following the announcement of the Lee Jaemyung administration's first housing supply policy, the "September 7 Measures," housing prices have resumed their upward trend due to a combination of factors. Key reasons include heightened expectations of further price increases, a shortage of new supply, the ongoing trend of base interest rate cuts, the shift of demand from rental to purchase as rental prices rise, and an increase in the money supply.

Ham Youngjin, head of the Real Estate Research Lab at Woori Bank, said, "Recently, the districts with the highest proportion of record-high transactions are Seongdong, Gwangjin, Gangdong, and Mapo, indicating that buyer sentiment is concentrating around the Han River belt. As overheating intensifies in areas adjacent to the Han River, the possibility of additional regulations is also being raised."

Currently, the market expects additional measures to be announced around the middle of this month. Key options under consideration include raising the actualization rate for publicly announced prices and the fair market value ratio to increase property holding taxes, tightening the debt service ratio (DSR) and loan-to-value (LTV) regulations, designating areas such as Seongdong, Mapo, and other Han River belt districts, as well as Bundang and Gwacheon, as speculative or regulated zones, and expanding land transaction permit zones.

In the provinces, a total of eight regions have surpassed their previous highs. Sangju in North Gyeongsang Province recorded the highest increase nationwide, jumping 20.71% from its previous peak of 85.41 in December 2021 to 103.10 this year. Yeongju (13.57%) and Mungyeong (11.87%) also posted double-digit increases.

However, the upward trend in some regions is unlikely to spread across all provincial areas. Yang Jiyeong, senior specialist at Shinhan Premier Pathfinder, said, "The provinces are fundamentally driven by real demand, and unless policies support this, it will be difficult for the upward trend to continue in the long term. Only with improvements in local living conditions and effective provincial housing policies can the upward trend be sustained."