Seoul apartment prices are climbing more sharply following the end of the multi-home owner capital gains tax moratorium. While the three Gangnam districts collectively widened their gains, the rally was even more pronounced in non-Gangnam areas such as Seongbuk, Seodaemun, Gwanak and Gangbuk, where many complexes are priced under 1.5 billion won. Jeonse prices have also risen more than 3% year-to-date, acting as a variable that is prompting end-users to shift toward purchases.
According to the "Weekly Apartment Price Trends" released by the Korea Real Estate Board on Wednesday, Seoul apartment sale prices rose 0.31% in the third week of May (as of the 18th) from the previous week. The increase widened by 0.03 percentage points from the prior week's 0.28% gain. Seoul apartment prices have expanded their rate of increase for three consecutive weeks, matching the fourth week of January (0.31%) for the highest weekly gain this year.
The upward trend is spreading across Seoul. Among the city's 25 autonomous districts, 17 saw their gains widen from the previous week. Seongbuk-gu rose 0.49%, recording the highest sale price increase in Seoul, with prices climbing primarily in large complexes in Jongam-dong and Gireum-dong. Seodaemun-gu also rose 0.46%, centered on Namgajwa-dong and Hongje-dong, while Gangbuk-gu gained 0.45% led by major complexes in Mia-dong and Beon-dong. Gwanak-gu likewise rose 0.45% as demand concentrated on major complexes in Bongcheon-dong and Sillim-dong. Gangseo-gu (0.43%), Gwangjin-gu (0.43%), Dobong-gu (0.37%), Guro-gu (0.33%) and Nowon-gu (0.32%) also posted strong gains.
The three Gangnam districts widened their gains as well. Gangnam-gu, which turned to gains last week, rose 0.20% this week, expanding from the previous week's 0.19%. Seocho-gu's increase widened from 0.17% to 0.26%, while Songpa-gu accelerated from 0.35% to 0.38%, led by large complexes in Jamsil-dong and Sincheon-dong. Gangdong-gu also widened its gain from 0.19% to 0.21%.
The upward trend continued in the broader Seoul metropolitan area. Apartment sale prices in the metropolitan area rose 0.17%, widening from the previous week's 0.14%. Price strength was particularly evident in areas considered residential hubs supporting the semiconductor industry belt. In Gyeonggi Province, Gwangmyeong rose 0.68%, while Anyang's Dongan-gu and Seongnam's Bundang-gu each gained 0.48%. Southern Gyeonggi areas also widened their gains, including Yongin's Suji-gu (0.20% to 0.38%), Suwon's Yeongtong-gu (0.26% to 0.35%) and Hwaseong's Dongtan-gu (0.35% to 0.46%).
The jeonse market also continues to rise. Seoul apartment jeonse prices rose 0.29% this week, widening from the previous week's 0.28%. The cumulative increase this year has reached 3.20%. The Korea Real Estate Board explained that amid steady leasing demand overall, inquiries are increasing and rental contracts are being signed at higher prices, particularly for complexes with favorable living conditions such as those near subway stations and large-scale developments.
The simultaneous inflow of demand from end-users without homes and from those seeking to upgrade is cited as a factor driving the price rally. Areas such as Gangbuk-gu and Gwanak-gu continue to attract single-person households without homes and newlywed couples thanks to relatively accessible pricing. Seodaemun-gu, Seongbuk-gu and Gangseo-gu are evaluated as areas with less price resistance from buyers, given the relatively small gap between recent transaction prices and listing prices.
"In areas under 1.5 billion won where jeonse and monthly rental listings are scarce, we are also observing tenants moving to purchase," said Nam Hyuk-woo, real estate researcher at Woori Bank. "As demand shifts to nearby non-regulated areas, the trend of price strength appears to be spreading." He added, "The current market is not one of polarization but rather a catch-up market, with a structure in which movements in lower-priced neighborhoods can affect higher-priced ones. If transactions and price strength persist in Seoul areas under 1.5 billion won, sellers in these areas could utilize some loans and other assets to upgrade to homes priced around 2 billion won in areas such as Seoul's Han River belt."
