Seoul's apartment prices have risen for 84 consecutive weeks, nearing the previous record of 85 weeks. Unlike past trends where prices fell in outer areas first, this time, the Gangnam district is experiencing declines while outer regions are on the rise. Although the duration of this increase is shorter than before, the cumulative rise is more than double.
According to the Korea Real Estate Agency, as of the second week of September (September 14), the average sale price of apartments in Seoul increased by 0.16% compared to the previous week, marking 84 weeks of continuous growth since the first week of February last year. This leaves just one week before matching the longest streak of 85 weeks recorded from June 2020 to January 2022.
During the previous longest growth period, prices began to decline in Eunpyeong District on December 20, 2021, followed by Dobong and Gangbuk Districts on December 27, and Seongbuk and Nowon Districts on January 10 of the following year. The overall sale prices in Seoul fell on January 24, ending that growth phase, although Gangnam and Seocho Districts saw slight increases of 0.01%.
In contrast, Gangnam and Seocho Districts have experienced six consecutive weeks of declines since August 10, while Songpa District has seen two weeks of decreases. However, all other 22 districts have reported price increases. This week, Jungnang District recorded the highest rise at 0.51%, followed by Seodaemun and Dobong Districts at 0.47% each, and Seongbuk District at 0.43%, highlighting the strength of outer areas.
The cumulative increase during this period is also significant. Based on weekly statistics from the Real Estate Agency, the cumulative increase in apartment prices during the previous longest growth period of 85 weeks was 7.71%. In contrast, the current growth period has seen a cumulative increase of 17.34% over 84 weeks, more than double the previous rate despite being one week shorter.
However, the recent upward trend is showing signs of slowing. The overall increase in Seoul dropped from 0.29% in the fourth week of August to 0.22%, 0.20%, and finally 0.16%. In outer areas, while Jungnang and Dobong Districts continued to rise, Gangbuk District's increase slowed from 0.46% to 0.26%, indicating regional disparities.
Market analysts suggest that the initial surge in core areas like Gangnam has led to a shift in demand towards less expensive regions due to loan and transaction regulations targeting high-priced homes, creating a 'matching' market dynamic.
Looking ahead, the key question is whether the weakness in Gangnam will spread to other areas or if the buying momentum in outer regions will continue. It is difficult to assume that a decline will occur at the same time simply because the current growth period is similar to past ones.
Seojin Hyung, a professor at Kwangwoon University, stated, "The ongoing supply shortage, coupled with the depreciation of currency value due to increased money supply, is likely to keep upward pressure on housing prices for the time being. In a situation where rental properties are scarce, actual buyers are moving to the sales market, particularly focusing on relatively lower-priced outer areas."
Kwon Dae-jung, a professor at Hansung University, noted, "As demand shifts to relatively lower-priced areas, a balloon effect is emerging, suggesting there is potential for further increases until spring next year. While the high-end housing market is experiencing a slowdown due to various regulations, demand is concentrating in mid- to low-priced areas, which could lead to increases in both sale and rental prices."
He added, "To quickly fill the supply gap, it is necessary to activate the supply of non-apartment housing. If the issues surrounding the calculation of housing units for multi-family homes and officetels are not addressed, there may be limits to expanding supply."
* This article has been translated by AI.
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