Seoul housing now four times more expensive than South Jeolla, BOK report says

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Seoul housing now four times more expensive than South Jeolla, BOK report says

Published: 18 Jun. 2025, 19:10 Updated: 19 Jun. 2025, 20:19

Audio report: written by reporters, read by AI

A view of downtown Seoul seen from Namsan in central Seoul on June 3 [YONHAP]

The cost of housing in Seoul has soared to more than four times that of South Jeolla, underscoring a deepening disparity in living expenses and inflation inequality across Korea, according to a report released Wednesday by the Bank of Korea (BOK).

The gap in cumulative housing price growth between Seoul and the national average since 2014 stood at 69.4 percentage points — the widest among G7 countries, according to the BOK report on the economic impact of housing price polarization. During that period, home prices in Seoul surged 112.3 percent, while the national average rose just 42.9 percent.

China ranked second with a 49.8 percentage point gap between Beijing and the national average. Japan followed with a 28.1 percentage point difference between Tokyo and the rest of the country, trailed by Canada’s Toronto with a gap of 24.5 percent and Australia’s Sydney with a 9.8 percentage point gap. Negative gaps were seen in the United States. New York showed a minus 16.3 percentage point gap, and the United Kingdom's London had a minus 19.1 percentage point difference, where home price growth was stronger outside major cities.

The report attributes Korea’s widening gap to intensified population concentration in the Seoul metropolitan area since 2014. As young people migrated to the capital in search of jobs, housing demand rose steadily in the region, while regional areas saw housing demand fall due to youth outflows and accelerating aging.

This urban migration has also widened Korea’s regional economic divide. Since 2015, the share of gross regional domestic product (GRDP) generated in the greater Seoul area surpassed that of all other regions combined and recently reached 53 percent, according to Statistics Korea.

A view of apartment complexes in Seongbuk District and Nowon District as seen from Mount Namsan in central Seoul on June 10. [YONHAP]

Past housing stimulus policies also played a role. “Between 2014 and 2016, deregulation and supply expansion aimed at boosting the construction sector led to a sharp increase in housing presales,” the report said. “These policies translated into increased supply after a lag of two to three years, and a flood of new homes in regional areas in 2021 and 2022 has weighed down housing prices in those markets to this day.”

The housing price gap has also led to a divide in perceived monthly living costs. As of March, the average perceived monthly cost of owning a home in Seoul — including mortgage interest and opportunity costs — was 2.29 million won ($1,670), 4.7 times higher than in South Jeolla with 490,000 won. Fourteen of Korea’s 17 major regions reported perceived housing costs below the national average of 1.14 million won, with the exceptions of Seoul, Sejong with 1.72 million won and Gyeonggi with 1.4 million won.

“Accumulated cost burdens are limiting consumption, particularly in the greater Seoul area,” said Jang Tae-yun, head of the BOK’s price trends team. “Stabilizing housing expenses is essential to ease sluggish consumer spending.”

He added that caution is warranted in implementing housing stimulus measures, particularly those focused on boosting construction in regional areas, as they may repeat the missteps of past policies.

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.
BY KIM KYUNG-HEE [[email protected]]