Seoul Apartment Prices Record Biggest Rise in 6 Years and 9 Months, Even Public Housing Shows Upward Trend

Seoul Apartment Prices Soar to 6-Year High

Seoul apartment prices have shown consecutive rises, with weekly trading prices in the third week of June recording the largest increase in 6 years and 9 months. According to the Korea Real Estate Board, Seoul apartment trading prices rose 0.36% compared to the previous week, marking a new turning point in the real estate market.

Background of Seoul Housing Price Surge

In response to the housing price surge in Seoul, the Financial Services Commission is taking emergency measures by introducing DSR (Debt Service Ratio) for jeonse loans and policy mortgages. This is interpreted as a preemptive measure to prevent real estate market overheating and ensure financial stability.

Particularly, not only Gangnam's three districts but also areas like Mapo-gu and Seongdong-gu in the 'Han River Belt' are showing increases, expanding the areas experiencing price rises. The upward trend is spreading to Seoul's outer areas, heating up the overall market atmosphere.

Auction Market Also Active

The auction market is also bustling alongside Seoul's apartment price boom. In May, the average successful bid rate for Seoul apartments reached 97.7%, the highest in 35 months. This indicates increasing demand for apartments even in the auction market.

With the continued rise in successful bid rates in Gangnam's three districts and Han River Belt areas, interest in real estate investment through auctions is also growing. This means the upward trend in the general trading market is transferring to the auction market as well.

Remarkable Rise in Public Housing Apartments

Public housing apartments are showing notable price increases, drawing buyers' attention. In major new towns, public housing apartments are reportedly trading at prices hundreds of millions of won above their original sale prices.

Public housing complexes like 'Godeok Nature & House D' are receiving significant attention, showing that public housing has evolved from simply being a means of homeownership to an investment destination.

Ulsan Records Highest Jeonse-to-Sale Price Ratio Nationally

Ulsan is showing a unique phenomenon with a jeonse-to-sale price ratio of 73.6%, the highest in the nation. With jeonse increases breaking through 70%, demand for converting to purchases is increasing.

During the same period, apartment sale prices showed little change while jeonse prices rose rapidly in a short time. According to the Ministry of Land, Infrastructure and Transport's actual jeonse transaction data, 373 out of 531 jeonse renewal contracts (70.2%) in Ulsan from January to May this year involved deposit increases.

Construction Industry Response

The construction industry is also actively responding to these market changes. HDC Hyundai Development Company is working on creating a global landmark through the Yongsan Depot project, planning to provide hotel-style amenities and customized town operation services to apartment residents.

Particularly, the strategy to increase regional value by utilizing the floating population of 100,000 people per day at HDC I'Park Mall is connected to HDC Yongsan Town and is expected to extend to the international business district, raising asset values throughout Yongsan.

Growing Construction Equipment Market

Along with the real estate development boom, the construction equipment market is also showing vitality. Crane companies like XCMG and HTS are emerging as new powerhouses in the crane industry, showing "strong growth even in recession."

According to reporter Park Hae-mook, XCMG Crane Korea Vice President Kim Ki-cheol stated, "Although construction companies recently face increased cost burdens due to rising raw material prices, HTS is aggressively conducting sales centered on new apartment construction sites."

Government's 4th New Town Plan

The government is moving to expand housing supply through the 4th new town plan comparable to Bundang. However, specific details regarding quantities and locations have not yet been determined.

While public rental and public housing apartment supply has been mentioned, specific quantities are missing. Experts analyze that if regulations are relaxed, there could be considerable political burden due to simultaneous stimulation of housing price increases and tax reduction controversies for the wealthy.

Market Outlook and Concerns

Real estate experts have mixed opinions on whether the current upward trend will continue. Some expect continued increases based on expectations of interest rate cuts and government policy changes.

However, other experts express concerns about excessive increases and mention the possibility of additional government regulations. They are particularly paying attention to the impact that strengthened financial regulations, such as the introduction of DSR for jeonse loans, will have on the market.

Changes in Investor Strategies

In this market situation, investor strategies are also changing. Interest is expanding from traditional Gangnam-centered investments to Han River Belt and outer areas, with significantly increased interest in public housing.

Particularly, with the activation of the auction market, interest in auctions as alternative investment means is increasing, leading to diversification in the real estate investment market.

Moving forward, attention is focused on how the government's additional measures, financial policy changes, and global economic conditions will affect the real estate market.

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Translated from Korean real estate news | Published on June 23, 2025

Original source: Trendy StoryDot