Home Prices Rise Despite Supply Measures… Demand Concentrates on Non-Gangnam Areas

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While the government has successively introduced real estate measures, including tax revisions and additional housing supply expansion, a clear divergence in temperature by price range is emerging in the Seoul housing market. While mid-to-low-priced apartments continue to hit record highs, high-end housing markets centered in Gangnam are seeing declines.

Reporter Lee Seong-hoon has the details.

[Reporter]

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

On the 11th, a unit with a dedicated area of 59㎡ was traded at 1.59 billion KRW, setting a new record high.

Demand is flocking to small and medium-sized apartments that carry relatively lower price burdens and are less affected by mortgage 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 cannot afford units that are too high-priced, buyers coming from outside the region are continuing to purchase properties while hitting new record highs....]

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 showed prominent upward trends with rises in the 0.4% range, and apartment prices across Seoul as a whole maintained an upward trajectory by rising 0.22%.

However, in the Gangnam area where high-priced apartments are concentrated, inquiries from buyers have dropped significantly, making transactions themselves difficult.

Apartment prices in Seocho-gu fell 0.09%, widening the drop, and Gangnam-gu also dropped 0.05%, which is analyzed to be influenced by the tax burden on high-end homes resulting from the tax revision proposals.

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

[Yang Ji-young / Senior Advisor at Shinhan Premier Pathfinder: Because the lease market is unstable, jeonse demand has converted into home-buying demand, shifting demand to relatively cheaper outer areas. In the case of the Gangnam area, as tax burdens on ultra-high-priced apartments have grown, prices have declined....]

Although the August 13 supply measures were announced, considerable time is still needed before actual housing is supplied and move-ins begin.

For the time being, price trends are expected to clearly diverge as demand for mid-to-low-priced homes driven by jeonse and wolse instability intersects with the aftermath of tax revisions targeting high-end housing.

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