Seoul Apartment Prices See Highest Growth Rate in Five Years (Comprehensive)

June Seoul Apartment Actual Transaction Prices Jump 2.5% Month-on-Month, Highest in Five Years
81% of Transactions Priced at 1.5 Billion Won or Less
Mid- to Low-Priced Demand Rises Amid Loan Regulations
Nowon District Leads Volume, Followed

In June, the actual transaction prices of Seoul apartments rose by 2.5% compared to the previous month, recording the highest monthly growth rate in five years. In July, the proportion of transactions for units priced 1.5 billion won or less reached its highest point in four months.

According to an analysis of the Korea Real Estate Board’s apartment actual transaction price index trends released by the Seoul Metropolitan Government on August 21, apartment prices in Seoul in June rose by 2.5% month-on-month and by 13.79% year-on-year. In particular, the month-on-month growth outpaced June 2021’s 2.44%—a period of a sharp price surge—marking the highest level in five years. This is seen as reflecting increased prices following the end of the heavy capital gains tax on multi-home owners in May and a reduction in urgent sales listings.

The price strength was especially pronounced in Seoul’s peripheral areas, such as the northeastern districts of Gangbuk, Dobong, and Nowon, as well as the southwestern districts of Gangseo, Guro, and Geumcheon. The upward trend was bolstered by increased transactions of properties priced at 1.5 billion won or less. By size, the medium-to-large sector (over 85㎡ and up to 135㎡) saw the highest growth at 3.05%.

In June, the actual transaction price of apartment jeonse (long-term deposit lease) contracts in Seoul increased by 1.28% compared to the previous month. By region, the northeastern districts recorded the steepest increase at 1.56% month-on-month. The Seoul apartment jeonse transaction price index rose 1.28% from the previous month, marking the fourth consecutive month of increases in the 1% range. The upward trend has continued for 11 consecutive months since August of last year.

In July, the transaction volume of Seoul apartments totaled 5,234 units, a 0.6% decline from the previous month. The figure remained in the 5,000 range for a second consecutive month. However, by price bracket, transactions at or below 1.5 billion won accounted for 81.2% of the total—a 4.9 percentage point increase from the previous month. After peaking at 83.5% in March, the share of transactions at or below 1.5 billion won had been declining, but began climbing again in May. Considering that real estate transaction reports must be submitted within 30 days of the contract and that July contracts may continue to be reported until the end of August, transaction volumes are expected to increase further going forward.

The rise in transactions of apartments at or below 1.5 billion won since May is attributed to a relative decrease in high-priced property transactions. Early in the year, stricter loan regulations led to a greater share of transactions involving units priced at or below 1.5 billion won. But in April and May, the end of the capital gains tax exemption led to an uptick in high-priced sales driven by tax-saving motives. As this concentration in high-priced deals has subsided, and with mid- to low-priced demand—subject to lending caps—growing once again, the share of transactions at or below 1.5 billion won has increased.

By district, Nowon-gu recorded the highest transaction volume at 632 units, followed by Jungnang, Gangseo, Guro, Seongbuk, and Eunpyeong. In these districts, the percentage of transactions at or below 1.5 billion won exceeded 95%.

Last month, the number of Seoul apartment jeonse lease transactions stood at 8,204, a marginal decrease of 0.2% compared to the previous month. By contrast, monthly rental transactions dropped 20.2% to 8,082. As a result, the proportion of jeonse contracts among apartment lease transactions returned to the 50.4% level, bringing the share of jeonse and monthly rental contracts to a roughly equal 50:50 split.

In July, 53.8% of jeonse transactions were renewal contracts, an increase from the previous month’s 52.8% and the same month a year prior (44.8%), continuing to hold at a high level. Meanwhile, the proportion of contract renewal request rights exercised fell to 53.5%, down from 55.8% in the previous month and 60.1% a year earlier.

Ham Young-jin, Head of Real Estate Research Lab at Woori Bank, said, “Following the measures announced on October 15, it is possible to borrow up to 600 million won for transactions at or below 1.5 billion won. Additionally, instability in the jeonse and monthly rental markets has driven more demand for purchasing homes, leading to significant price increases in Seoul’s suburban areas. Considering the upcoming fall real estate moving season, potential easing of household loan quotas, and supply shortages in the jeonse and monthly rental markets, this trend of rising prices in outlying areas is expected to continue through the end of the year.”

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