[Exclusive] Seoul Apartment Prices Rise Even Higher Than Under Moon Jae-in... Annual Growth Rate Hits All-Time High [Real Estate AtoZ]

Annual Price Growth Hits Record High Since Korea Real Estate Board Began Tracking
Previous Peak Was 8.0% During the Moon Jae-in Administration
9 of the Top 10 Districts for Price Growth Are Adjacent to the Han River
Reduced Supply and Incre

This year, the annual growth rate of apartment prices in Seoul has reached its highest level since the Korea Real Estate Board began compiling statistics. Concerns over reduced supply were significant from the beginning of the year, leading to concentrated demand along the Han River. As liquidity increased, housing prices continued to rise. The upward trend is expected to persist into next year, and there are even predictions that the government may have no choice but to resort to its final measure: raising taxes.

Yonhap News Agency

According to the Korea Real Estate Board on December 16, the cumulative increase in Seoul apartment sale prices for this year, as of the second week of December (based on the 8th), stood at 8.1%. This is the highest annual figure since statistics began in 2012. The previous record was 8.0%, set during President Moon Jae-in's administration in both 2018 and 2021. With three weekly reports remaining, it is highly unlikely that a negative rate will be recorded, making it probable that this year's housing price growth rate will close at an all-time high.

Seoul apartment prices have been on a continuous rise for 45 consecutive weeks since the first week of February this year. In the third week of October, the weekly increase reached a record high of 0.50%. Afterward, the pace of growth slowed due to the October 15th measures, which designated all of Seoul and 12 areas in Gyeonggi Province as "triple regulation zones" (land transaction permission zones, speculative overheating districts, and adjustment target areas). However, the weekly growth rate still hovers around 0.2%. When annualized, a weekly increase of 0.2% exceeds 10% per year.

By district, Songpa District saw the highest increase at 19.78%, followed by Seongdong District (17.94%), Mapo District (13.50%), Seocho District (13.20%), Gangnam District (12.90%), Yangcheon District (12.25%), Yongsan District (12.18%), Gangdong District (11.76%), Gwangjin District (11.48%), and Yeongdeungpo District (10.06%). Except for Yangcheon District, all of these top nine districts are adjacent to the Han River. Including Dongjak District (9.91%) in 11th place, the top-performing regions converge along the Han River Belt.

In contrast, outer districts such as Nowon, Dobong, and Gangbuk recorded increases of around 1%. Nowon District saw a 1.76% rise, Gangbuk District 0.93%, and Dobong District 0.79%. Geumcheon District (1.15%) and Jungnang District (0.7%) showed similar trends.

The upward trend centered on the Han River Belt has further deepened asset polarization within Seoul. The market capitalization of Seoul apartments increased from about 1,624 trillion won at the end of last year to 1,817 trillion won as of November this year. Of this, the market capitalization increases in Gangnam District (47.3 trillion won), Songpa District (34.1 trillion won), and Seocho District (28.25 trillion won) totaled 109.65 trillion won, accounting for more than half of the total increase in Seoul. When the increases in Mapo, Yongsan, Seongdong, Gwangjin, Gangdong, Dongjak, and Yeongdeungpo-other Han River Belt districts-are added, their combined share reaches 83% (160 trillion won out of the total 193 trillion won increase).

The primary cause of this year's price surge is cited as worsening supply conditions. According to Real Estate R114, the number of new apartment units (excluding rentals) scheduled for occupancy in Seoul is expected to drop sharply to 17,687 in 2026, 11,113 in 2027, and 8,337 in 2028. Compared to the combined total of 87,515 units for the previous three years (2023-2025), this represents a decrease of nearly 60%. This is effectively an "occupancy cliff."

With the outlook for a supply gap, increased liquidity has further fueled upward price pressure. Amid a trend of lower benchmark interest rates and expansionary fiscal policy, more funds have flowed into Seoul's core residential areas, where properties are scarce. As of September, South Korea's broad money supply (M2) was 4,447.9604 trillion won, up 8.5% from the same month last year. This is the largest increase since June 2022.

The upward trend in housing prices is likely to continue into next year. Under current conditions, the likelihood of immediate additional measures appears low. While Land, Infrastructure and Transport Minister Kim Yoonduk and others have pledged to announce supply measures within the year, there is little time left before year-end. The government also said it would announce reform plans for the Korea Land and Housing Corporation (LH), which plays a central role in housing supply, by the end of the year, but this task has been postponed to next year.

Experts point out that balanced regional development should be at the center of policy as a medium- to long-term solution for real estate stability. Kim Hyosun, Chief Real Estate Specialist at NH Nonghyup Bank, said, "It is significant that the President cited the concentration in the capital area as the cause of the housing price problem," adding, "Balanced development, which has been virtually absent from real estate policy, may return as a core agenda item." Recently, President Lee Jaemyung stated, "I have been heavily criticized over the housing price issue, but to be honest, there is no solution. The fundamental problem is the concentration in the capital area. I believe that balanced regional development is truly necessary to address this issue."

There are also predictions that, if housing prices cannot be controlled, the government will ultimately have no choice but to address "taxes." Cha Sangwook, CEO of Connected Ground, said, "Expanding supply or tightening lending regulations has clear limitations in curbing the concentration of high-priced housing. Ultimately, the only option is to impose taxes commensurate with the increased prices." However, he added, "Discussions on adjusting property taxes or the taxation system are likely to intensify after next year's local elections."