Seoul's Apartment Prices Reach Highest Increase in Nearly 6 Years Despite Government's Supply Measures

Seoul's apartment prices have recently surged to their highest level in almost six years,

Seoul's apartment prices have recently surged to their highest level in almost six years, continuing a 21-week streak of increases. Despite the government's large-scale housing supply measures, prices in key areas such as the Gangnam 3 districts (Gangnam, Seocho, and Songpa) and the 'Mayongseong' districts (Mapo, Yongsan, and Seongdong) have led this upward trend. In this article, we explore the current state of Seoul's apartment market, the factors driving this price increase, and the contrasting trends between the Seoul metropolitan area and other regions.

Seoul's apartment market is once again in the spotlight. According to the Korea Real Estate Board's 'Weekly Apartment Price Trends for the Second Week of August (as of the 12th),' apartment prices in Seoul rose by 0.32% compared to the previous week. This marks the 21st consecutive week of price increases and the largest weekly gain since September 2018.

The primary drivers of this price surge have been the Gangnam 3 districts (Gangnam, Seocho, Songpa) and the 'Mayongseong' districts (Mapo, Yongsan, Seongdong). Notably, apartment prices in Seongdong-gu spiked by 0.63% in just one week, marking the most significant rise in nearly 11 years. This persistent upward trend highlights the intense demand in Seoul's apartment market, with its effects spreading to surrounding areas like Incheon and Gyeonggi Province.

In contrast, the apartment markets in other regions of the country are experiencing a downturn. Cities such as Daegu, Jeju, Gwangju, and Busan are facing a decline in apartment prices due to a buildup of unsold units. This divergence underscores the growing gap between the real estate markets in the Seoul metropolitan area and other parts of the country.

Despite the government's recent announcement of a large-scale housing supply plan, the market remains overheated. Experts attribute the continued rise in apartment prices to increased transaction volumes, rising listing prices, and ongoing speculative buying.

The sustained increase in Seoul's apartment prices suggests that the government's housing supply measures alone may not be sufficient to stabilize the market. The relentless rise in prices, particularly in the Gangnam 3 and Mayongseong districts, is expected to continue for the foreseeable future. Meanwhile, the contrast between the booming Seoul metropolitan area and the declining real estate markets in other regions highlights the need for targeted interventions. Moving forward, it will be crucial to closely monitor government actions and market responses to better understand the direction of the real estate market.