Outer Seoul Apartment Prices on the Rise, New Records Keep Coming

Amid recent instability in the monthly and yearly rental markets, demand for home purchases is increasing. Apartment prices, particularly in Seoul's outer districts that have been relatively quiet, are now rising, with complexes hitting record-high sales. Even in Dobong-gu, an area that saw little price fluctuation during previous market upswings, apartments are surpassing their previous peak prices. A real estate agent in Dobong-gu reported that there is only one unit available for immediate move-in in the 21-pyeong (approx. 70 sqm) size, and its price has jumped to the 600 million won range in just two months. These signs of price increases are pronounced in the 'Nodogang' (Nowon, Dobong, Gangbuk) and 'Geumgwanggu' (Geumcheon, Gwanak, Guro) regions, which are densely populated with mid-to-low priced complexes under 1.5 billion won.

The phenomenon of rising home prices extending to Seoul's outskirts is attributed to a convergence of stringent loan regulations and an extreme rental housing shortage in the city center, concentrating purchasing power in specific areas. Seoul's apartment rent supply-demand index has reached 122.5. The shortage of supply and rising rental costs are stimulating buying sentiment, leading to a spread of the mindset that it's better to buy a home, even if it's located a bit further from central Seoul. As purchasing demand shifts to more affordable outer Seoul areas, the trend of 'closing the gap' in prices is continuing. A price-matching phenomenon is expected to persist, centering on mid-to-low priced complexes.

With the announcement of tax reform proposals, there have been calls for the government to implement real estate market stabilization measures to alleviate the rental crisis.