Gangnam Apartment Prices Fall While Outskirts Rise in Seoul: Loan Regulations and 'Gap-Filling' Drive Trends

Comparison of Average Transaction Amounts in Ministry of Land Data

Gangnam and Yongsan, with High Transaction Values, Continue to Decline

Rise Accelerates in Guro, Gwanak, Seongbuk, Eunpyeong, and Other Districts

As apartment sale prices in Seoul's Gangnam 3 Districts (Gangnam, Seocho, Songpa) and Yongsan District have shifted into a downward trend, prices in peripheral areas continue to rise. Demand is concentrated in regions with relatively lower home prices, creating upward pressure on prices. This is interpreted as a result of buyers gravitating toward areas where it is easier to secure financing, given ongoing loan regulations.

According to an analysis of the Ministry of Land, Infrastructure and Transport's actual transaction price system on March 12, districts with higher average transaction amounts have seen apartment prices decline or the rate of increase slow. In contrast, areas with lower transaction amounts are showing a clear upward trend. In Gangnam District, which has experienced a decline for three consecutive weeks since late February, the average apartment transaction amount reported so far this year is about 2.597 billion won. For homes priced over 2.5 billion won, the maximum possible mortgage loan is just 200 million won.

Similarly, Seocho District, which has also recorded three consecutive weeks of negative growth, saw an average transaction amount of 2.522 billion won, while Yongsan District stood at 2.305 billion won. Considering that all apartments in Seoul are designated as land transaction permit zones, making gap investments impossible, this means buyers must finance only a very small portion through loans and provide most of the funds themselves.

Apartment by the Han River in Seoul. Photo by Yonhap News

Most of the areas where the rate of increase slowed or declined compared to the previous month were among those with the highest average transaction amounts. In Seongdong District (1.747 billion won), Mapo District (1.411 billion won), Dongjak District (1.407 billion won), Yangcheon District (1.278 billion won), and Gangdong District (1.236 billion won), the weekly apartment price growth has slowed or reversed into a downward trend compared to the previous week.

On the other hand, in areas with lower transaction amounts, the increase in apartment prices accelerated compared to the previous week. Seongbuk District and Jung District both posted a 0.27% increase in sale prices, the highest among Seoul's 25 districts. This year, the average apartment transaction amount in Seongbuk District is 942 million won, ranking 16th, and in Jung District, 1.164 billion won, ranking 13th.

Dobong District, with the lowest average transaction amount at 566 million won, and Nowon District, with the next lowest, both saw their price indices rise by 0.01 and 0.02 percentage points, respectively. Similarly, in Gwanak, Guro, and Jungnang Districts, where average transaction amounts range from 600 million to 800 million won, the rate of price increase was also higher than the previous week.

The primary reason is interpreted as the difference in loan limits. Apartment transactions in Seoul are effectively limited to actual homebuyers, and for multiple homeowners, the loan-to-value ratio is 0%, which essentially blocks transactions. The loan amount also varies by home price: for homes priced at 1.5 billion won or less, buyers can borrow up to 600 million won.

While listings are increasing across Seoul, there are regional differences. According to data from the real estate platform Asil, from January 23—when President Lee Jaemyung began issuing real estate policy messages, including the revival of heavy capital gains taxes—until now, listings in Seongdong District have increased by about 84%. Seongdong District, located along the Han River, has long been considered an area that led the price surge alongside the Gangnam 3 Districts.

A "Quick Sale" Advertisement Posted at a Real Estate Agency in Gangnam-gu, Seoul. Photo by Yonhap News

Similarly, listings rose by about 68% in Gangdong District and 62% in Songpa District, both previously active markets. The industry sees this as an influx of tax-saving properties from multiple homeowners. As inventory grows, the number of listings with reduced asking prices has also noticeably increased. For instance, the asking price for a 155m² unit at Shinhyundai Apartment in Apgujeong-dong, Gangnam District, fell by more than 1 billion won, from around 9 billion won until last week to about 8 billion won now. Other apartment complexes in the Gangnam area are also seeing a clear downward trend in asking prices for certain listings.

In contrast, in more affordable areas such as Geumcheon, Jungnang, Gangbuk, and Dobong Districts, the increase in listings remains in the 10% range. At E-Pyunhansesang Susaek Ecoforet in Eunpyeong District, an 84m² unit sold for 777 million won on March 4, but signed for over 820 million won—an increase of more than 40 million won—on March 9. In Guro District, a Hanmaeul 84m² unit changed hands at over 860 million won on March 6, up more than 30 million won from 825 million won last month.

Park Wongap, Senior Real Estate Expert at KB Kookmin Bank, said, "After May 10, there could be an increase in listings from rental business owners or those holding high-value single homes, so it is unlikely that the market will face a severe shortage of available properties." He added, "Since the government is likely to specify tax strengthening measures targeting the Gangnam and Mayongseong Han River Belt areas, it will be difficult for Gangnam house prices to rebound sharply in the short term."

He continued, "We are seeing a pronounced tendency for first-time buyers and younger generations to look for outer districts where their borrowing capacity is higher. This can be seen as a 'gap filling' phenomenon, with prices in those areas catching up to the rest of the market."

This content was produced with the assistance of AI translation services.