Seoul Apartment Prices Rise for First Time in 6 Weeks as Han River Belt Leads 0.14% Increase

Seoul apartment prices have expanded their upward trend for the first time in six weeks, with the market showing renewed momentum despite government cooling measures. According to the Korea Real Estate Board's survey on August 11, Seoul apartment transaction prices rose 0.14% in the first week of August, up from the previous week's 0.12%, marking the first expansion in price growth since the June 27 measures that limited housing loans in the Seoul metropolitan area to 600 million won.

The Han River belt areas led the price increases, with Gangnam-gu rising from 0.11% to 0.15%, Seongdong-gu from 0.22% to 0.33%, Gwangjin-gu from 0.17% to 0.24%, Yongsan-gu from 0.17% to 0.22%, Mapo-gu from 0.11% to 0.14%, and Gangdong-gu from 0.07% to 0.14%.

For American readers familiar with real estate cycles, this pattern resembles market responses seen in major U.S. metropolitan areas where regulatory cooling measures often provide only temporary price moderation before underlying demand pressures resurface, particularly in prime locations with limited supply.

Government Supply Policy Implementation Lags Behind Market Demand

While Seoul apartment prices resume their upward trajectory, the actual implementation rate of government housing supply policies remains disappointingly low, with only about half of the announced real estate supply measures being executed. This implementation gap has raised questions about policy effectiveness in addressing fundamental supply shortages.

The slow progress of third new town developments and existing urban redevelopment and reconstruction projects means that actual supply reaching the market will require considerable time. Industry experts express concerns that current supply plans alone cannot adequately respond to increasing demand pressures.

A real estate expert noted that "the temporary effect of June 27 loan regulations appears to have been short-lived, and with fundamental supply shortage problems unresolved, the market is beginning to move again."

Regional Market Variations and Policy Challenges

Despite Seoul's price increases, the broader Seoul metropolitan area showed more modest growth at 0.05%, with Incheon (-0.01%) and Gyeonggi Province (-0.01%) posting slight declines. Major regional cities including Busan (0.09%), Daegu (0.06%), and Gwangju (0.04%) showed gentle upward trends, while the national average remained at 0.06%.

Seoul's rental market saw even stronger growth at 0.22%, exceeding sales price increases. Gangnam's three districts (Gangnam, Seocho, Songpa) particularly drove rental price rises, contributing to overall housing cost burden increases that mirror affordability challenges seen in cities like San Francisco and New York.

Looking ahead to the second half of 2025, real estate experts predict Seoul's apartment market will likely continue selective price increases, particularly in areas with redevelopment and reconstruction prospects and transportation infrastructure improvements. The government is reportedly considering additional market stabilization measures, including speculation area redesignations, tighter loan regulations, and enhanced taxation on multiple property owners.

However, market voices increasingly emphasize that supply expansion represents the fundamental solution to housing affordability. The current situation reflects broader global trends where major metropolitan areas struggle with housing supply constraints, demographic pressures, and the challenge of balancing market stability with housing accessibility for residents.

Original Korean Article: https://trendy.storydot.kr/archives/675

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Original Article (Korean): Read in Korean