Korea's overall dwelling price growth is low compared with major countries, but high-end dwellings in Seoul posted a top-tier increase among major global cities. Analysts say polarization in the dwelling market is deepening as high-end dwellings in the three Gangnam districts and along the Han River have surged, while areas outside the capital region and ordinary dwellings have been relatively weak.
According to the report "Medium- to long-term reform tasks for asset inequality and property holding taxes," released on the 2nd by the National Assembly Futures Institute, an analysis of the Bank for International Settlements (BIS) nominal dwelling price index showed that nationwide dwelling prices in Korea rose about 1.56 times from 2003 to 2023.
During the same period, Seoul dwelling prices rose 1.74 times. Using an indicator that sets dwelling prices at 100 at a given point in time to compare long-term trends, the pace of home price increases in Korea and Seoul is relatively lower than in other countries or major cities.
U.S. dwelling prices rose 2.8 times from 2000 to 2023, and Canada climbed 3.1 times from 2005 to 2023. Norway's nationwide dwelling prices were up 3.4 times, Berlin in Germany 3.9 times, and the Oslo region in Norway 4.1 times.
Korea also ranked in the lower tier in the Organisation for Economic Co-operation and Development (OECD) real dwelling price index, which excludes inflation effects.
Korea's real dwelling price index in 2024 rose only 1.2 times compared with 2000. That is below the OECD average of 1.6 times.
Canada rose 2.9 times over the same period, the highest increase among those surveyed in 24 countries. Australia, the United States, and the United Kingdom also rose about 1.8 to 2.6 times. Based on the 2024 index, Korea was the second lowest after Finland.
However, the picture changes markedly when looking only at high-end dwellings in Seoul.
According to the global high-end dwelling price index released by U.K. real estate consultancy Knight Frank, prices for high-end dwellings in Seoul in the third quarter of last year rose 25.2% from a year earlier.
Among 46 cities worldwide, that was the second-highest increase after Tokyo, Japan, at 55.9%. The index is calculated based on the top 5% most expensive dwellings in each city.
During the same period, prices of high-end dwellings across the 46 cities rose an average of 2.5%. Seoul's increase was about 10 times the global average.
The increase in Bengaluru, India, which ranked third, was 9.2%, showing a wide gap with Seoul. Excluding Seoul, the increases in most of the other top-tier cities also remained in the single digits.
In the cumulative increase over the past five years, high-end dwellings in Seoul rose 80.9%, ranking fourth in the world. Dubai, United Arab Emirates, was highest at 224.3%, followed by Tokyo at 115.0% and Manila, Philippines, at 81.0%.
While the average nationwide and Seoul home price increases are low, the notably higher rise in high-end dwellings is attributed to concentrated price gains in the three Gangnam districts and along the Han River.
Nationwide statistics include the long-sluggish non-capital-region dwelling market and ordinary dwellings with relatively small gains. Because of this, the sharp surge in some high-end dwellings may not show up properly in the overall average, leading to the so-called "average trap," critics say.
Limits in how the statistics are compiled are also being discussed. The Korean dwelling price data used by the BIS and OECD are based on the Korea Real Estate Board (REB)'s Nationwide Dwelling Price Trend Survey.
The survey evaluates prices based on transaction cases of sample dwellings and does not directly reflect all actual transaction prices. Because of this, when dwelling prices move sharply over a short period, it may fail to fully capture market changes.
The report analyzed that while Seoul dwelling prices rose sharply in 2024 and 2025, these trends may not have been fully reflected in the BIS and OECD statistics.
Lee Seon-hwa, a senior research fellow at the National Assembly Futures Institute, said, "Seoul's dwelling market is highly polarized, so the gap in price increases between high-end and ordinary dwellings can be large," and noted, "There is also a possibility that statistics based on sample surveys did not fully capture the recent surge in Seoul home prices."