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Plague of soaring apartment prices spreads across Seoul

Published: 19 Jun. 2025, 17:27 Updated: 07 Jul. 2025, 15:16

Apartments across Seoul are shown on June 19. [YONHAP]

Apartment prices in Seoul are soaring, with price hikes now spreading beyond the traditionally affluent southeastern districts and Han River areas to the entire capital. Calls are growing for the government to quickly act to cool the market.

According to the Korea Real Estate Board on Thursday, apartment prices in the capital rose 0.36 percent from the previous week in the third week of June, continuing a 20-week upward streak. This marks the steepest increase since the second week of September 2018 — 352 weeks, or six years and nine months ago — when prices jumped 0.45 percent.

“The upward trend in Seoul continues, especially in popular areas such as large-scale apartment complexes and districts pursuing redevelopment,” the board said. “Both asking prices and buyer inquiries are increasing.”

All regions of Seoul saw price gains accelerate. The southeastern region, which includes the southern districts of Seocho, Gangnam and Songpa as well as Gangdong District in eastern Seoul, saw prices rise 0.7 percent from the previous week’s 0.56 percent. The central region climbed from 0.28 percent to 0.42 percent, the northwestern region from 0.23 percent to 0.34 percent, the southwestern region from 0.17 percent to 0.24 percent and the northeastern region from 0.12 percent to 0.18 percent.

“A key factor will be how the market reacts to the third phase of the debt service ratio stress test set to take effect in July,” said a real estate board official. “There is significant tension internally as we monitor the market.”

However, variations among districts remain stark. Seongdong District in eastern Seoul saw the largest jump, rising 0.76 percent — the highest among all districts. On June 11, Seoul Mayor Oh Se-hoon noted that the city is “closely monitoring Seongdong District’s home prices,” hinting at the possible use of land transaction approval zoning — which reqiures district approval for transactions exceeding a certain value — if necessary.

Gangnam District followed at 0.75 percent, with Gangdong District’s 0.69 percent, western Seoul's Mapo District’s 0.66 percent and Seocho District’s 0.65 percent not far behind. The figure for Mapo is the highest for the district since statistics were first compiled.

In contrast, northern Seoul's Dobong District’s 0.02 percent and the 0.03 percent and 0.04 percent for Jungnang District and Dongdaemun District both in eastern Seoul, respectively, showed little movement. Songpa District’s growth slightly slowed from 0.71 to 0.70 percent, and Gangbuk District in northern Seoul eased from 0.06 to 0.04 percent.

The sharp rise in Seoul housing prices has prompted the government to consider policy responses. Measures being considered include expanding the scope of regulated areas and tightening lending limits. However, stronger regulatory measures — such as those implemented during the former Moon Jae-in administration — are reportedly not under consideration within the government due to potential side effects.

Experts say pre-emptive policies to increase housing supply should take priority.

“To deliver a clear signal to the market, the government should consider increasing floor area ratios in the third 'new town' redevelopment site, easing redevelopment and reconstruction regulations and addressing the risks of real estate project financing early,” said Park Hap-soo, an adjunct professor at Konkuk University’s Graduate School of Real Estate Studies. “This could shift anxious buyers into pre-sale applicants and stabilize the market.”

Lee Eun-hyung, a researcher at the Korea Research Institute for Construction Policy, added, “The government needs to revise its previously inflated supply targets to regain trust. Excessive regulations, like land transaction approvals, could backfire as they did in the past.”

Nationwide, apartment prices rose 0.5 percent in the third week of June, a slight increase from the previous week. Prices in the greater Seoul area climbed 0.13 percent, while prices in noncapital regions continued to decline, falling 0.03 percent.

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