"As real-demand buyers flock to Dongdaemun-gu, Seodaemun-gu, and Seongbuk-gu—areas offering convenient commutes to central Seoul and Yeouido—they have established themselves as the 'New Top 3.' In these regions, record-high prices are being broken consecutively around major complexes, creating a seller-dominated market." (Kim In-man, Director of the Kim In-man Real Estate Economic Research Institute)

"The balloon effect, where rising housing prices in the Gangnam area spread to other parts of Seoul, is persisting. As Jeonse (lump-sum housing deposits) has practically vanished in Seoul and even monthly rents are rising, demand is rushing in with the mindset to 'buy an apartment right now in any accessible location.'" (Kim Je-kyung, Director of Tumi Real Estate Consulting & Ph.D. in Urban and Regional Planning)

More than half of the apartments recently traded in Seoul have recorded all-time highs, with a streak of record-breaking prices continuing particularly in complexes located in Dongdaemun-gu, Seodaemun-gu, and Seongbuk-gu. Real estate experts analyzed this as "perhaps a natural outcome resulting from real-demand buyers finding realistic alternatives in line with government regulations."

Seoul Apartment Transactions Decline While Prices Rise

In Jeonnong-dong, Dongdaemun-gu, Seoul, stands the Cheongnyangni Station Lotte Castle SKY-L65. The 84㎡ exclusive area of this apartment traded at 2.14 billion won in July, setting a record high. (Captured from Naver Maps)

According to an analysis of Ministry of Land, Infrastructure and Transport apartment sales transaction data by the real estate platform Zigbang, out of 10,930 Seoul apartments in the third quarter, 5,977 units (54.7%) were sold at prices equal to or higher than their previous record highs. The proportion of transactions at or above previous peaks in Seoul has been expanding its upward trend following the first quarter (38.2%) and second quarter (43.0%) of this year.

Among Seoul's 25 autonomous districts, 22 districts—excluding Gangnam, Seocho, and Songpa—saw an increase in the proportion of record-high transactions compared to the first quarter. By district, Dongdaemun-gu recorded the highest proportion of transactions at or above previous peaks (rising from 45.7% in Q1 to 81.9% in Q3), followed by Seodaemun-gu (44.4% → 73.5%) and Seongbuk-gu (32.1% → 68.5%).

Notably, Seongbuk-gu saw its record-high transaction proportion more than double compared to the first quarter, showing the largest increase. In the Gyeonggi region, apartments also recorded high proportions of record-high transactions, including Bundang-gu in Seongnam City (94.1%), Sujeong-gu in the same city (77.2%), Suji-gu in Yongin City (74.1%), and Hanam City (73.6%).

Kim Eun-sun, head of Zigbang's Big Data Lab, stated in a telephone interview on October 13, "Amid recently tightened loan regulations, anxieties over housing supply shortages and rental market conditions appear to have strengthened home-buying sentiment among real-demand buyers." She added, "Purchasing power has been selectively concentrated in areas close to central Seoul that have recently supplied a relatively high number of new apartments, as well as regions with relatively weaker loan regulation intensity."

In the recent Seoul real estate market, prices are rising amidst a decrease in transaction volume. According to the Korea Real Estate Board, Seoul apartment sales prices recorded an 87-week consecutive upward trend from the first week of February last year through the first week of October this year. Meanwhile, the number of Seoul apartment sales transactions dropped 66% year-on-year to 2,944 cases in September (based on reports filed as of October 13, according to Seoul Real Estate Information Plaza statistics).

"Possibility of Housing Price Rise Expanding to 'Geum-Gwan-Gu'"

The rising housing prices in northern Seoul have established a new normal for the 'national housing type' (84㎡ exclusive area) at the early 2-billion-won range. In Dongdaemun-gu, the 84㎡ exclusive area of Cheongnyangni Station Lotte Castle SKY-L65 traded at 2.14 billion won in July, while the 84㎡ exclusive area of Imun IPARK Xi was sold at 2.06 billion won in August, both hitting record highs. In Seodaemun-gu, the 84㎡ exclusive area of e-Pyeonhansesang Sinchon sold for 2.38 billion won, setting a new record (based on data from the real estate platform Asil).

Regarding this, Director Kim Je-kyung explained, "The fact that major apartment prices in Dongdaemun-gu, Seodaemun-gu, and Seongbuk-gu have comfortably exceeded 2 billion won, and that an apartment near a Shinbundang Line station in Suji-gu, Yongin City, Gyeonggi Province, traded at 1.9 billion won, is a symbolic event in many ways, showing that the housing price rise balloon effect has spread to Seoul's outer skirts and Gyeonggi Province." Pinpointing 'anxiety' among real-demand buyers as the primary background for this price surge, Director Kim analyzed:

"As Seoul housing prices continue to rise, market anxiety is mounting that 'the government might further slash mortgage loans—such as reducing the maximum 600 million won loan for apartments under 1.5 billion won, and even cutting the 400 million won loan for homes priced between 1.5 billion and 2.5 billion won.' Real-demand buyers appear to be moving to purchase apartments before any potential additional loan regulations are introduced."

Experts predict that the upward trend in Seoul apartment prices could spread even further outward. Director Kim In-man noted, "It is unlikely that Seoul apartment prices will drop significantly in the near future; rather, there is a strong possibility that the upward price momentum will expand to 'No-Do-Gang' (Nowon, Dobong, and Gangbuk districts) and 'Geum-Gwan-Gu' (Geumcheon, Gwanak, and Guro districts)." Director Kim Je-kyung also projected, "Unless the government rolls out extraordinary measures, the current upward trend in Seoul housing prices could record 100 consecutive weeks of increases."

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