Seoul’s rising home prices redraw the map of private education

Seoul's long-established private education landscape is shifting as rising home prices and growing concentrations of affluent households reshape where families spend on after-school education.

A visit to the hagwon (cram school) district near Samho Garden Intersection in Banpo-dong, Seocho District, on June 22 showed yellow hagwon shuttle buses filling nearby roads around 4 p.m. and crosswalks crowded with students ranging from elementary school children accompanied by parents to middle and high school students arriving by bicycle.

"With so many newly built apartment complexes in the area, more parents prefer sending their children to nearby hagwon instead of commuting all the way to Daechi-dong," said an instructor surnamed Lee, who teacher at an hagwon in the neighborhood.

The traditional three-way dominance of Daechi-dong in Gangnam District, Mok-dong in Yangcheon District and Junggye-dong in Nowon District is beginning to change as spending power for private education grows in areas where home prices have surged.

Seocho District's hagwon sales index reached 136.2 during the January-April period this year, using 2023 sales as the baseline of 100, an analysis of sales at 19 major hagwon districts nationwide conducted by BC Card for the JoongAng Ilbo found. The figure rose sharply from 78.7 in 2024 and 95.3 in 2025.

Sales continued to increase in Gangnam District, home to Daechi-dong, with an index of 133.8, and in Songpa District at 173.0. Gwangjin District, home to Gwangnam elementary, middle and high schools, also posted strong growth with an index of 171.0. Gwangjin District, an eastern Seoul neighborhood along the Han River, has seen apartment prices climb faster than the city average in recent years.

By contrast, sales declined in Yangcheon District, where Mok-dong is located, to 90.9, and in Nowon District, home to Junggye-dong, to 72.9 — both long considered among Seoul's traditional private education districts.

Experts attributed the shift to soaring home prices in Seoul's three Gangnam districts.

"It is not that hagwon districts in Mok-dong or Nowon have particularly declined, but that capital has become increasingly concentrated in the Gangnam area," said Yoon Ji-hae, head of research at Real Estate R114. "Unlike in the past when Gangnam was dominated by older apartment complexes, many large-scale new developments have been completed in recent years, widening differences in purchasing power."

The trend is also creating new hagwon districts in neighborhoods where rising wealth enables households to spend heavily on education.

"House prices ultimately reflect whether families can afford to spend several million won every month on private education," said Kim In-man, head of the Kim In-man Real Estate Economy Institute. "These days, a hagwon district can only develop successfully if there are more than 10,000 apartments priced above 2 billion to 3 billion won [$1.3 million to $1.9 million]."

The gap between successful and struggling hagwon districts has also widened. Well-established districts with strong university admission records continue attracting students from outside their neighborhoods, while local hagwon elsewhere face declining enrollment.

Among the 19 hagwon districts analyzed, the share of hagwon spending by customers living outside the district was highest in Seocho District at 87.0 percent, followed by Gangnam District at 86.3 percent and Songpa District at 79.7 percent.

In contrast, the share of outside customers in Nowon District fell 11.8 percentage points from 2023 to 42.5 percent.

"Even in Junggye-dong, once students reach high school, the sentiment is that they eventually move to hagwon in Daechi-dong," one parent in the area said. "Driving them there is exhausting, but the students are much more satisfied."

The polarization is also becoming more pronounced in Gyeonggi.

The Pyeongchon hagwon district in Anyang's Dongan District increased the share of outside customers to 70.7 percent by attracting students from southwestern Seoul metropolitan areas, while outside customers continued to decline in both Ilsandong District by 58.3 percent and Ilsanseo District by 51.6 percent.

"We drop off our child off at Daehwa Station at around 6 or 7 a.m. on weekends so they can take Seoul Subway Line No. 3 to attend a 9 a.m. class at an hagwon in Daechi-dong," a parent living in Goyang said. "During school vacations, some families even rent one-room apartments near the hagwon."

Outside the capital region, Dunsan-dong in Daejeon has also emerged as a destination for students traveling long distances for private education. Its hagwon sales index reached 225.4 this year, more than doubling from 2023.

"The demand from middle and high school students in Sejong has increasingly shifted to Daejeon, while students attending autonomous private high schools across the Chungcheong region also travel to Dunsan-dong because of limited local hagwon options," a college entrance hagwon official in Daejeon said.

"The ability to attract customers from outside the area has become the defining competitive advantage for hagwon districts," said Kim Hee-jeong, head of communications at BC Card. "Spending by students traveling to hagwon, once concentrated in traditional education districts, is now expanding to regional hubs such as Daejeon and Anyang."

At the same time, neighborhood hagwon are facing mounting pressure.

The number of hagwon users nationwide has fallen by about 16 percent compared to 2023 as the school-age population declines and more students gravitate toward major hagwon districts.

"I've been running an English hagwon in a neighborhood outside a major school district for three years, and competition among local hagwon for a shrinking number of students keeps getting fiercer," said a director in their 30s. "I'm even considering relocating to a major education district and opening a smaller hagwon there."

"Since spending on private education is like a bottomless pit for household spending, families have become more selective," Yoon, head of research at Real Estate R114, said. "They tend to only send children with strong academic potential to major hagwon districts, while others rely on online lectures instead."

BY OH HYO-JEONG [[email protected]]