Prices Rise Despite Supply Measures… Demand Flocks to Non-Gangnam Areas

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While the government has rolled out consecutive real estate measures, including tax revisions and supply expansions, a stark temperature difference is emerging across price brackets in the Seoul housing market. While relatively affordable, mid-to-low-priced apartments are continuing to set record highs, high-priced housing markets in the Gangnam area are seeing declines and sluggish transactions.

Here is a report by Reporter Lee Seong-hoon.

[Reporter]

This is an apartment complex in Seongbuk-gu, Seoul.

On the 11th, a unit with a dedicated area of 59 square meters was traded at 1.59 billion won, setting a new record high.

Demand is flocking to small and medium-sized apartments that carry relatively lower price burdens and are less subject to loan regulations.

[Real Estate Agent in Seongbuk-gu, Seoul: Most of the people coming to view houses are newlyweds or people in their 30s. Since they simply cannot afford high-end properties, buyers coming from outside the district are setting new record highs and continuing to purchase homes....]

Apartment prices in Seongbuk-gu rose 0.45% this week, recording the highest growth rate in Seoul.

Jungnang-gu, Seodaemun-gu, and Gangbuk-gu also saw noticeable rises in mid-to-low-priced areas by posting increases in the 0.4% range, while Seoul's overall apartment prices continued an upward trend by rising 0.22%.

However, the Gangnam area, dense with high-priced apartments, is seeing a sharp decline in buyer inquiries, making transactions themselves difficult.

Apartment prices in Seocho-gu fell 0.09% to widen their drop, and Gangnam-gu also declined by 0.05%, which is analyzed to be influenced by the tax burdens on high-priced homes stemming from tax revision proposals.

[Taeil / Real Estate Agent in Seocho-gu, Seoul: Transactions are not happening well, but aren't those who need to sell still required to do so? There is a set timeframe, and if you miss that window, taxes increase further, so if you want to sell, you have to lower (the price).]

[Yang Ji-young / Senior Advisor at Shinhan Premier Pathfinder: Because the Jeonse (lump-sum housing deposit) and monthly rent markets are unstable, Jeonse demand has converted into purchase demand, shifting demand to relatively cheaper outskirts. In the Gangnam area, as the tax burden on ultra-high-priced apartments has grown, prices have declined...]

Although the August 13 supply measures were announced, considerable time is still needed before actual housing is supplied and residents can move in.

For the time being, market trends are expected to clearly diverge by price bracket as the aftermath of mid-to-low-priced demand driven by Jeonse and monthly rent instability collides with the impact of tax revision proposals targeting high-priced homes.

(Video Editing: Choi Hye-young, VJ: Jeong Han-uk)
※ Please note: This article was translated by AI and may contain errors.