Last year, Seoul apartment prices was found to have risen by the most in 19 years since 2006. On an annual cumulative basis, Seoul apartment prices jumped by nearly 9%, and in some districts such as Songpa and Seongdong, prices rose by about 20% over the year.
◇ Biggest increase since 2006 under Roh Moo-hyun
According to the Korea Real Estate Board (REB) on the 1st, from January to December (as of the 29th) last year, the cumulative increase in Seoul apartment sale prices over the year was 8.71%. This is the highest growth rate in 19 years since 2006 (23.46%) under Roh Moo-hyun, which set a record high. It also exceeded the annual growth rate (8.03% in 2018) during the Moon Jae-in administration, when home prices surged.
By district, Songpa recorded the highest increase at 20.92% among the 25 districts. It was followed by Seongdong (19.12%), Mapo (14.26%), Seocho (14.11%), Gangnam (13.59%), Yongsan (13.21%), Yangcheon (13.14%), Gangdong (12.63%), Gwangjin (12.23%), Yeongdeungpo (10.99%), and Dongjak (10.99%), with 11 districts rising more than 10%.
The REB analyzed that, regarding recent Seoul apartment prices, "with overall transaction volume decreasing, localized increases centered on certain major complexes with development expectations and favorable residential conditions led to contracts being signed, pushing up prices across Seoul."
Excluding Seoul, most areas in the greater Seoul area saw lower gains or even declines from the previous year. Gyeonggi rose 1.37% from the previous year, while Incheon (-0.65%), Busan (-1.11%), Daegu (-3.81%), Daejeon (-2.17%), and Gwangju (-1.96%) were among the major cities that fell. In contrast, Ulsan (2.1%) and Sejong (1.96%) saw apartment prices rise.
Some areas in Gyeonggi Province recorded steep gains. Gwacheon's apartment prices rose 20.46% last year, and Seongnam Bundang (19.1%), Yongin Suji (9.06%), and Hanam (7.71%) also posted high increases.
Park Won-gap, a senior expert at KB Kookmin Bank, said, "The public rental dwellings that the government says it will supply often do not meet the expectations of genuine middle-class and higher would-be buyers in Seoul, so it will likely remain difficult to resolve the supply shortage going forward."
◇ Songpa and Gangdong post highest jeonse price gains in Seoul
Last year, jeonse price growth in Seoul was highest in Songpa and Gangdong. Songpa rose 8.99% from the previous year, and Gangdong climbed 8.26%. Gwangjin (5.01%), Yeongdeungpo (4.85%), Yangcheon (4.82%), Dongjak (4.57%), Yongsan (4.49%), Gangseo (4.38%), and Seocho (4.04%) also recorded relatively high jeonse price increases.
In Gyeonggi, jeonse prices rose significantly in Anyang Dongan (9.13%), Hanam (8.7%), Gwacheon (8.27%), Gwangju (6.45%), Suwon Yeongtong (8.05%), Yongin Suji (5.81%), Guri (5.79%), and Seongnam Bundang (5.75%).
Nam Hyeok-woo, a real estate researcher at Woori Bank, said, "With policy factors such as lending regulations intersecting with changes in the macroeconomic environment, including high interest rates and tax burdens, we expect the strength of monthly rent in the lease market to continue," adding, "If this persists, the supply of pure jeonse listings could tighten further."