Seoul Home Prices Rise for 84th Week Amid Diverging Trends in Gangnam and Gangbuk

Seoul's apartment prices have risen for 84 consecutive weeks, nearing the record for the longest increase, while the Gangnam area experiences a decline. In contrast, neighborhoods in the northern and outer regions, such as Jungnang, Dobong, and Seodaemun, are driving the upward trend.

The Korea Real Estate Agency reported on September 17 that apartment prices in Seoul increased by 0.16% compared to the previous week. This marks the 84th consecutive week of price increases since the first week of February last year, just one week shy of the record 85-week streak from June 2020 to January 2022. Nationwide, apartment prices rose by 0.08%, while the metropolitan area saw a 0.15% increase, with provincial areas remaining stable.

This current price surge differs from previous trends. During the last longest increase, the decline began in the outer areas, with Eunpyeong District dropping on December 20, 2021, followed by Dobong and Gangbuk on December 27, and Seongbuk and Nowon on January 10, 2022. The overall decline in Seoul's apartment prices began on January 24, 2022, ending that price surge.

In contrast, the Gangnam area is showing weakness first this time. This week, apartment prices in Gangnam District fell by 0.36%, while prices in Seocho and Songpa dropped by 0.26% and 0.12%, respectively. Gangnam and Seocho have seen six consecutive weeks of decline, while Songpa has experienced two weeks of falling prices.

While all three districts in Gangnam have decreased, the remaining 22 districts have seen price increases. Notably, Jungnang District recorded the highest increase at 0.51%, followed by Dobong at 0.47%, Seongbuk at 0.43%, and Dongdaemun at 0.36%. The overall increase in the 14 northern districts was 0.29%, significantly higher than the 0.04% increase in the 11 districts of Gangnam.

Not only the duration of the increase but also the cumulative growth shows a difference from the past. According to the weekly statistics from the Real Estate Agency, the cumulative increase during the previous longest streak of 85 weeks was 7.71%. In contrast, the current surge has seen a cumulative increase of 17.34% over 84 weeks. Although the duration is one week shorter, the cumulative growth is more than double.

However, the pace of recent increases is slowing. The rate of increase in Seoul's apartment prices dropped from 0.29% in the fourth week of August to 0.20% in the first week of September, and further to 0.16% in the second week of September. The increase rate for the second week of September fell to the 0.1% range for the first time in about four months.

The upward trend in outer areas is not uniform. While Jungnang and Dobong recorded high increases, some regions saw a reduction in the rate of increase compared to the previous week. As the overall increase in Seoul slows, regional disparities are becoming more pronounced.

Similar trends are evident in KB Real Estate statistics. According to the weekly KB Apartment Market Trends report released by KB Kookmin Bank, as of September 14, nationwide apartment prices rose by 0.09% compared to the previous week. The metropolitan area saw a 0.17% increase, with Seoul at 0.20%, Gyeonggi at 0.19%, and Incheon at 0.03%.

In Seoul, Gangbuk District recorded the highest increase at 0.56%, followed by Jungnang (0.43%), Gwanak (0.41%), Dongdaemun (0.39%), and Eunpyeong (0.39%). In contrast, Gangnam District saw a 0.13% decline, continuing its downward trend for five consecutive weeks.

KB Real Estate noted that there is a demand for relatively lower-priced housing in Gangbuk, although transactions remain sluggish. In Gangnam, an increase in properties for sale following the announcement of tax reforms has led to a wait-and-see attitude among buyers, resulting in price declines, particularly in redevelopment areas like Daechi and Apgujeong.

The rental market also shows a stronger upward trend in the Gangbuk area. According to the Real Estate Agency, Seoul's apartment rental prices rose by 0.17%, with the 14 northern districts increasing by 0.27%, while the 11 districts in Gangnam only saw a 0.09% increase. Notable increases were recorded in Nowon (0.45%), Jungnang (0.40%), and Dongdaemun (0.34%).

Demand for sales in the Gangnam area continues. According to data from the Supreme Court's registration information system, as of August, there were 16,126 sales applications in Seoul's 25 districts, an increase of 448 (2.9%) from July's 15,678 applications. However, this figure represents a decrease of 1,812 (10.1%) compared to 17,938 applications in August of the previous year.

By age group, the largest number of applicants were those aged 50 to 59, totaling 4,070, accounting for 25.2% of all applicants. This was followed by those aged 60 to 69 with 3,690 (22.9%), 40 to 49 with 3,557 (22.1%), over 70 with 2,846 (17.6%), and 30 to 39 with 1,719 (10.7%).

By district, Songpa had the highest number of sales applications at 1,446, followed by Nowon with 1,124, Gangnam with 1,011, Gangdong with 904, and Gangseo with 866.

The housing market outlook shows a disparity between the metropolitan and provincial areas. The Korea Housing Industry Research Institute reported on September 15 that the housing business outlook index for September fell by 8.7 points to 79.9, down from 88.6 the previous month. This index quantifies the outlook perceived by housing developers, indicating that a score below 100 suggests a pessimistic view of future market conditions.

In contrast, the outlook index for the metropolitan area rose to 89.2, an increase of 3.1 points from the previous month. Seoul's index rose from 92.8 to 97.2, a gain of 4.4 points, while Gyeonggi increased from 83.7 to 91.1, a rise of 7.4 points. However, Incheon saw a decline from 81.8 to 79.3, a drop of 2.5 points.

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