Seoul Apartment Price Surge Differs From 2022 in Both Scale and Character

The current rise in Seoul apartment prices has lasted about as long as the rally that ran into early 2022, but its magnitude and dynamics are markedly different. The cumulative gain so far (total rise since prices began climbing) stands at roughly 17.6%, about double the level of that time. Home prices have risen even more sharply despite higher interest rates and stricter lending regulations. This rally was led by Seoul's core districts such as Gangnam and the Han River belt, with outlying areas of the capital subsequently taking the baton—a so-called catch-up market.

Another backdrop to the current rally is the 2023 jeonse fraud crisis. With demand shifting from villas to apartments, jeonse and monthly rents rose sharply, which analysts say translated into increased home-buying demand. While the recent rise in sale prices has stalled, rent prices continue to climb. Yoon Ji-hae, head of research lab at Real Estate 114, noted, "When deciding whether to buy a home or extend a lease for another two years, people are increasingly leaning toward buying," adding, "We are slightly past the midpoint, but it doesn't feel like we've entered the latter stage of the rally yet."

Unlike Seoul, regional markets show no signs of recovery. As the Seoul apartment market heats up, a price divide is emerging between the capital region and the provinces. This gap between Seoul and the rest of the country is another point that distinguishes the current period from the 2022 rally. Jung Hwa-ok, a licensed real estate agent in Chuncheon, Gangwon Province, said a growing number of young people are buying homes in Seoul with financial support from their parents.