Seoul Apartment Prices Up 0.28%, Rents Also Rise Sharply

According to the weekly apartment price trend for the second week of May announced by the Korea Real Estate Board, Seoul apartment sales prices rose an average of 0.28% compared to the previous week. The average rise in Seoul apartment sales prices was 0.28% week-on-week, with the growth rate, which had been around 0.14-0.15% for the preceding three weeks, widening by 0.13 percentage points this week. This marks the highest increase in 15 weeks since the fourth week of January (0.31%). Amid a decrease in sale listings aimed at avoiding tax burdens, the upward pressure on prices has expanded due to inflows of genuine demand and investment demand.

Gangnam District, which had shown weakness for the past 11 weeks, rose 0.19% this week, rebounding for the first time in 12 weeks, and Songpa District also saw its rate of increase widen. All 25 administrative districts in Seoul have returned to an uptrend. Seongbuk District rose as much as 0.54%, nearly doubling its week-on-week increase rate. Seodaemun District also expanded its price surge from 0.20% to 0.45%.

Rental prices also rose 0.28%, recording the highest surge in approximately 10 years and 6 months. The rental market also saw its highest increase rate in 10 and a half years due to worsening supply shortages. The Seoul apartment rental price increase rate was 0.28%, widening by 0.05 percentage points from the previous week, and marking the highest level in approximately 10 years and 6 months since the second week of November 2015 (0.31%).

Park Won-gap, Senior Real Estate Expert at KB Kookmin Bank, analyzed that the decrease in listings from multi-homeowners and the increased demand from younger buyers looking to purchase homes outside of Gangnam have led to the overall rise in Seoul's market prices. Nam Hyuk-woo, a real estate researcher at Woori Bank, added that the widening surge is characterized by demand from sellers in lower-tier areas looking to upgrade to better living environments at more affordable prices, along with existing demand that had been on the sidelines re-entering the market.