Price gap between cheap and expensive apartments widest ever
Expensive apartments are getting more expensive at a faster pace than other apartments, according to a recent report.
Apartments in the top quintile by price are now on average ten times more expensive than those in the lowest quintile, KB Land said on Sunday. The data have been compiled since 2008, and the ratio has never been greater.
The ratio was 8.1 in October 2009 and declined to 4.4 in June 2015 due to the effects of the global financial crisis. After the administration of Moon Jae-in started, the ratio increased, from 4.7 in 2017 to 8.8 in June 2021.
Apartments in the bottom quintile on average cost 123.2 million won ($98,328) in May, which is a 70,000-won increase from the previous month, while the average price of apartments in the top quintile reached 1.25 billion won, a rise of 1.85 million won from April.
The year-on-year increase rate of the top 20 percent was 18.15 percent in May, while that of the lowest 20 percent was 2.85 percent.
Korea had the fastest rising home prices among Asian countries in the first quarter, according to Knight Frank.
The British real estate consultancy said housing prices in Seoul surged by 20.2 percent on year, higher than Tokyo's 15.4 percent.
The average sale price of large apartments bigger than 135 square meters (1,453 square feet) was 2.7 billion won in May, a 134.4-million-won rise compared to late last year.
Apartments in Gangnam, southern Seoul, cost 2.9 billion won in May. Lower-priced apartments became cheaper.
As the Yoon Suk-yeol administration is planning to ease some housing policies, prices could continue to rise at the high end.
"The phenomenon of people desiring to purchase houses for future price appreciation is still continuing after a new administration has started off," said Seo Jin-hyeong, co-representative of the Fair Housing Forum.
"However, a sudden change in real estate policy seems difficult at the moment."
BY KIM WON [email@example.com]