The rise in Seoul apartment prices has continued for the 86th straight week, surpassing the longest streak set during the Moon Jae-in administration. The cumulative increase over this period topped 17%, more than double the longest upcycle under Moon Jae-in. Seoul apartment prices have climbed for longer and by a wider margin than in the past.
According to the Korea Real Estate Board (REB) on the 13th, Seoul apartment sale prices in the first week of September (as of the 7th) rose 0.20% from the previous week. After turning upward in the third week of January last year (as of the 20th), Seoul apartment prices have been on the rise for the 86th week on a calendar basis. Periods when no data were published due to Lunar New Year and Chuseok holidays were included in the overall trend.
This exceeds the longest rise on record during the Moon Jae-in administration. Seoul apartment prices climbed for 85 weeks from the second week of June 2020 to the third week of January 2022.
The current uptrend began before the Lee Jae-myung administration took office. However, 66 of the 86 weeks overlap with the current administration's term. Although the government rolled out a series of real estate measures, it did not break the upward trend in Seoul home prices.
The magnitude of the increase was also larger than before. The Seoul apartment sale price index rose 17.16% from January last year through the first week of this month. That is about 2.2 times the 7.71% cumulative gain over the 85-week longest upcycle during the Moon Jae-in administration. Even counting only after President Lee's inauguration on June 4 last year, the cumulative increase exceeded 14%.
In this upcycle, buying interest has also shifted locations. Early on, the three Gangnam districts—Gangnam, Seocho, and Songpa—and preferred areas along the Han River including Seongdong led the climb. As gains in the Gangnam area have recently slowed, buying interest is spreading to the outskirts of Seoul where prices are relatively lower.
In the first week of September, apartment prices in the three Gangnam districts fell across the board for the first time in five months. In contrast, Gangbuk rose 0.46%, Dobong and Seodaemun each rose 0.43%, and Seongbuk rose 0.42%. All were above or near double the Seoul average increase of 0.20%. Analysts say a "balloon effect" is emerging, with demand moving from heavily regulated areas to outlying districts with relatively less price burden.
Kim In-man, head of the Kim In-man Real Estate Economy Research Institute, said, "If current market conditions do not change significantly, the uptrend in Seoul apartment prices could extend beyond 100 weeks and become prolonged." Kim said, "If liquidity expansion and investment demand driven by COVID-19 led the upcycle during the Moon Jae-in administration, now there is no small number of end-user buyers in their 20s and 30s entering the sales market due to instability in jeonse and monthly rents and rising presale prices."