There is growing assessment that transactions in Seoul's real estate market are being reshaped by demand from people without homes. While home prices in Gangnam and other areas drawing demand from those seeking to trade up to a "smart one home" have entered a correction, prices in mid- to low-priced districts such as Nowon, Gangseo, and Gwanak are showing a solid trend as demand for purchasing dwellings from people without homes concentrates there. With more than 90% of apartment transactions focused on units priced at 1.5 billion won or less, where the loan limit is relatively higher, record-high transaction prices are also increasing in these districts.
On the 15th, the Korea Real Estate Board (REB) said home prices are rising mainly in Seoul's mid- to low-priced areas that are relatively accessible to people without homes. Districts considered mid- to low-priced within Seoul—Seongbuk-gu (0.27%), Seodaemun-gu (0.26%), Gangseo-gu (0.25%), and Nowon-gu (0.14%)—are showing relatively high rates of increase.
Meanwhile, the decline in home prices that began in the three Gangnam districts (Gangnam, Seocho, and Songpa) is spreading to the Han River belt (Mapo, Yongsan, Seongdong, Gwangjin, Yeongdeungpo, Dongjak, and Gangdong). Songpa-gu (-0.09%→-0.17%), Gangnam-gu (-0.07%→-0.13%), and Seocho-gu (-0.01%→-0.07%) widened their declines. Gangdong-gu (-0.01%) turned downward for the first time in 56 weeks since the first week of Feb. last year, and gains in Seongdong-gu (0.18%→0.06%) and Mapo-gu (0.13%→0.07%) also slowed.
Record-high apartment transaction prices, which had previously been concentrated in the Gangnam area, are also occurring in mid- to low-priced districts. According to the real estate platform Apartment Me, of the 1,593 Seoul apartment transactions that set new record highs on the 15th, about half were in mid- to low-priced areas. Excluding the three Gangnam districts and the Han River belt, there were 786 apartment transactions at record-high prices.
In particular, there were many record-high transactions in districts with numerous apartments priced at 1.5 billion won or less, including Gangseo-gu (118 cases), Seongbuk-gu (101), Seodaemun-gu (75), and Gwanak-gu (68).
Analysts say the rise in home prices in Seoul's mid- to low-priced districts has been influenced by the influx of end-user demand from people without homes. According to the Supreme Court's Registration Information Plaza, the multiple-ownership index for collective buildings held by those owning two collective buildings stood at 11.265 on the 15th. This index hit its lowest level in two years since December 2023 (11.243). The multiple-ownership index represents the share of multiple owners among all collective-building holders. A decline in the multiple-ownership index can be interpreted as a shift from investment to an end-user–driven market.
Nam Hyeok-woo of the Woori Bank Real Estate Research Institute said, "It appears the market is being reshaped from the polarized market led by trade-up demand in 2024 to one aligning around people without homes," adding, "This is also why mid- to low-priced districts such as Seodaemun, Dongdaemun, Gangseo, Seongbuk, Gwanak, and Nowon are showing relatively solid price trends."
Nam added, "While the potential for price gains is important in these districts, some also secure their own homes due to factors such as shortages of jeonsei and monthly-rent listings," noting, "In districts densely packed with mid- to low-priced apartments (1 billion to 1.5 billion won or less), even as the total number of listings increases, steady inflows of end-user demand appear to be keeping trends relatively solid."