Seoul apartment prices near record winning streak as outer-district surge continues

Seoul apartment prices have risen for 84 consecutive weeks, closing in on the all-time record of 85 straight weeks set during the Moon Jae-in administration. Seongbuk-gu has led the charge, with prices climbing 14 percent so far this year, while outer districts including Dongdaemun-gu, Dobong-gu and Jungnang-gu have also sustained strong momentum. Analysts say tightening loan regulations are pushing owner-occupiers toward more affordable units on the city's periphery.

The Korea Real Estate Board's weekly apartment price survey for the second week of September — based on data as of Monday — showed Seoul apartment prices rose 0.16 percent this week, narrowing from the 0.20 percent gain recorded the previous week.

The moderation was attributed to a continued flow of price-reduced listings in the three Gangnam districts — Gangnam-gu, Seocho-gu and Songpa-gu — offset by rising contract prices centered on mid-to-low-priced complexes. Surging jeonse and monthly rent prices, combined with a sharp drop in available listings, have drawn owner-occupiers including young adults in their 20s and 30s and newlyweds toward complexes priced at or below 1.5 billion won ($1.1 million), where lending restrictions are comparatively lighter.

Several districts posted wider weekly gains. Dongdaemun-gu accelerated from 0.34 percent last week to 0.36 percent this week. Dobong-gu rose from 0.43 percent to 0.47 percent over the same period, and Jungnang-gu climbed from 0.40 percent to 0.51 percent.

Among Seoul's 25 districts, Seongbuk-gu recorded the highest cumulative gain this year at 14.01 percent. On a weekly basis, the district rose 0.43 percent this week, slightly faster than the 0.42 percent gain posted the previous week.

Several other districts also surpassed a 10 percent cumulative gain for the year: Seodaemun-gu at 11.45 percent, Gangseo-gu at 11.35 percent, Guro-gu at 11.32 percent, Gwanak-gu at 10.80 percent, Nowon-gu at 10.73 percent, Dongdaemun-gu at 10.59 percent and Jung-gu at 10.45 percent.

Nam Hyeok-woo, a real estate researcher at Woori Bank, said that as high interest rates increase borrowing costs and mid-tier areas sustain prolonged price strength, owner-occupiers are moving to outer districts as their next-best option. He added that in areas such as Jungnang-gu and Dobong-gu, a shortage of jeonse and monthly rental listings — more acute than in other parts of the city — has prompted some tenants to shift toward buying.

Nam said he expects price strength centered on lower-to-mid-tier Seoul districts and Gyeonggi Province, where latent demand remains deep, to continue for now.

In contrast, Songpa-gu — which turned negative in September for the first time in about five months — fell 0.12 percent this week, steepening from a 0.02 percent decline the previous week. Seocho-gu and Gangnam-gu fell 0.26 percent and 0.36 percent, respectively. Gangnam-gu, which has been declining since the second week of August, has seen its cumulative gain for the year shrink to just 0.72 percent.

Nam said key factors weighing heavily on capital gains tax burdens for high-priced homes — including a newly introduced cap on the long-term residency income deduction — continue to pressure sellers. He said the localized price correction centered on the Apgujeong and Banpo areas is spreading to neighboring Songpa-gu.

Nam added that some Songpa-gu apartment owners looking to upgrade to properties in the two core Gangnam districts have belatedly adjusted their asking prices downward, a move he said also contributed to this week's price decline.