Seoul apartment prices rise for 86 consecutive weeks as record housing rally shifts beyond Gangnam
Apartment prices in the city have risen for a record 86 consecutive weeks, with lower-priced outer districts outpacing Gangnam as jeonse (lump sum deposits) and monthly rents also climb.
Apartment complexes in Seoul are seen from the observatory of Lotte World Tower in Songpa District, southern Seoul, on Aug. 14.NEWS1
Seoul apartment prices have climbed for a record 86 consecutive weeks as of the first week of September, but the boom looks different from the last one: Instead of affluent Gangnam leading the way, cheaper outer districts are now driving the longest price rally in the city's recorded history.
Seoul apartment prices rose 0.195 percent week over week in the first seven days of September, as of Monday, the Korea Real Estate Board (KREB) said in its weekly report Thursday. That extends a streak that began the third week of January last year, when prices first turned positive with a 0.004 percent gain.
The count includes two holiday weeks — those of last year's Lunar New Year and Chuseok — when KREB folded its report into the following week instead of publishing on schedule, putting its total releases at 84 despite the 86-week streak.
The new streak surpasses the previous record of 85 straight weeks, set under the Moon Jae-in administration from the second week of June 2020 to the third week of January 2022 — a period with no skipped publications, so its 85 measured weeks matched its 85 published reports.
What stands out more than the length of the current streak is its intensity. Cumulative gains, or the total percentage increase, during the 86-week run total 17.16 percent, more than double the 7.71 percent cumulative gain recorded during the 85-week streak under Moon.
The center of this rally has also shifted. The wealthy Gangnam District in southern Seoul led the city's price gains in the past, but this year cheaper outer districts, where mid- and lower-priced apartments are more common, have taken the lead.
In the same first-week-of-September data, Gangbuk District in northern Seoul rose 0.46 percent and Dobong District, also in northern Seoul, rose 0.43 percent, while Gangnam District fell 0.35 percent and Seocho District in southern Seoul fell 0.3 percent.
Apartment sale prices in all three of Seoul's premium Gangnam-area neighborhoods turned negative this week.
“While tougher regulations targeting ultrahigh-end housing kept Gangnam prices in check, demand shifted to outer districts instead, a balloon effect,” said Seo Jin-hyung, a professor of real estate law at Kwangwoon University.
President Lee Jae Myung speaks at a Cabinet meeting at the Blue House in central Seoul on Sept. 1.YONHAP
The market widely expects this pattern to continue for now. Loan and tax regulations have reduced buying power for higher-priced homes, but underlying housing demand hasn't disappeared. If prices in outer districts keep climbing quickly, buyers still looking for homes in Seoul could increasingly get pushed out to Gyeonggi, spreading the rally across the wider metropolitan area.
A bigger concern is that a “triple rally” — sale prices, jeonse (lump sum)deposits and monthly rents all climbing together — has become the market's new normal. Seoul apartment jeonse prices have risen a cumulative 7.61 percent so far this year, 4.8 times the 1.59 percent gain recorded over the same period last year. Jeonse is a Korean rental system where the tenant pays a large lump-sum deposit — often 50 to 80 percent of the home's value — instead of monthly rent, and gets it back in full when the lease ends.
A 119-square-meter (1,280-square-foot) unit in Seocho District was reported at a record 2.5 billion won ($1.87 million) in jeonse on Tuesday, while a 117-square-meter unit in Seongbuk District, eastern Seoul, hit a record 920 million won on Aug. 30.
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Analysts attribute the jeonse price increase to two policy changes aimed at pushing homeowners toward living in their own properties rather than renting them out: the reinstatement of heavier capital gains taxes on owners of multiple homes on May 10, and tighter regulations on nonresident single homeowners — both of which have pulled units off the rental market.
Some in the market worry that jeonse shortages could worsen further if the government keeps pushing its current policies. President Lee Jae Myung said in June that jeonse is “a system that will disappear in the process of normalization.” He has argued that jeonse deposits function as effectively interest-free loans from tenants to landlords, who have used that cash to buy up additional properties — a practice he says has artificially inflated housing prices.
Monthly rents for Seoul apartments have also risen 5.73 percent so far this year through July, according to KREB's monthly nationwide housing price survey — 4.2 times the 1.36 percent increase over the same period last year. The average monthly rent first crossed 1.5 million won in January and topped 1.6 million won by July, just half a year later. That, too, is attributed to a shrinking supply of rental units from owners of multiple homes and nonresident single homeowners.
The simultaneous rise in sale and rental prices risks becoming a self-reinforcing cycle. Rising jeonse prices narrow the gap with sale prices, which can push non-homeowners to become buyers, while rising monthly rents can push tenants back toward jeonse instead, with upward pressure spreading between the two markets.
Though Seoul's overall apartment prices kept rising, the pace of increase slowed somewhat, down 0.02 percentage points from the week before as of Monday, per the KREB.
Experts still expect Seoul's housing supply crunch to persist, as the number of new units planned for the greater Seoul area declines and the government's construction plans continue to fall behind schedule. “Seoul home prices have set a new record for the longest rally on record, and jeonse and monthly rents are climbing too,” said Lee Chang-moo, a professor of urban engineering at Hanyang University. “With supply conditions this poor as well, it's time for the government to fully re-examine both the effects and the side effects of its policies.”
This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
