Seoul apartment prices up 14.6% on-year in July as buying spreads beyond Gangnam

Actual transaction prices for Seoul apartments rose more than 14% over the past year, with buying momentum spreading beyond Gangnam into mid-to-low-priced areas in the northeastern parts of the city. Even as prices continued to climb, sales and lease transaction volumes fell sharply in August.

An analysis of Korea Real Estate Board data released by the Seoul Metropolitan Government on Friday showed that the actual transaction price of Seoul apartments rose 1.93% in July from the previous month and 14.56% from the same month last year. The actual transaction price index climbed from 100 in June to 101.9 in July.

The Seoul Metropolitan Government attributed the continued price gains to a combination of factors: distressed listings in high-priced areas were absorbed, regular transactions at prevailing asking prices followed, and genuine end-user demand flowed into mid-to-low-priced neighborhoods.

Prices rose across all five of Seoul's regional zones. The southeastern zone — covering Seocho, Gangnam, Songpa and Gangdong — posted the steepest monthly gain at 2.73%, followed by the northeastern zone — Gangbuk, Dobong, Nowon, Seongbuk, Jungnang, Dongdaemun, Seongdong and Gwangjin — at 2.11%. The central zone of Yongsan, Jongno and Jung-gu rose 2.09%, the southwestern zone 1.77% and the northwestern zone 1.36%. On a year-on-year basis, the southwestern zone led all areas with a 16.06% gain, while the northeastern zone rose 15.91% — both outpacing the city-wide average.

Prices rose across all apartment sizes. Units with an exclusive use area of 40 square meters or less recorded the highest monthly gain at 3.05%, while large units exceeding 135 square meters were up 2.90%. Small units between 40 and 60 square meters rose 2.28%, mid-small units between 60 and 85 square meters gained 1.46%, and mid-large units between 85 and 135 square meters were up 1.06%.

Jeonse prices also continued to rise. The actual transaction price for Seoul apartment jeonse contracts in July increased 0.50% from the previous month and 11.90% from a year earlier. By zone, the northeastern area rose 0.88% and the southeastern area 0.86%, while the southwestern zone fell 0.13%.

Despite rising prices, transaction volumes dropped sharply in August. As of Tuesday, 3,143 apartment sales were recorded in Seoul in August, down 46.2% from 5,838 in July. After holding above 5,000 transactions in June and July, volumes fell to the 3,000 range in August. The final tally could rise, however, as contracts signed in August can be reported to authorities through the end of September.

A shift toward mid-to-low-priced housing was also evident. The share of apartment transactions involving units priced at 1.5 billion won ($1.1 million) or below expanded from 72.4% in May to 79.9% in August. Nowon-gu led all Seoul districts with 415 transactions in August, of which 99.8% involved units priced at 1.5 billion won or below. In Dobong-gu, Gangbuk-gu and Geumcheon-gu, every transaction fell within that price range.

Jeonse and monthly rent transactions also declined. Jeonse deals for Seoul apartments in August totaled 7,263, down 18.0% from the previous month, while monthly rent transactions fell 20.7% to 7,347. Compared with the same month last year, jeonse transactions were down 32.2% and monthly rent deals fell 18.7%.

While new lease moves slowed, renewals increased. The share of jeonse renewals among all jeonse transactions in August rose to 58.9%, up from 53.0% the previous month and 43.7% a year earlier. However, the proportion of renewals that invoked the right to request contract renewal fell to 48.7% from 54.1% the previous month. The Seoul Metropolitan Government said the simultaneous decline in sales and lease transactions, combined with the growing share of jeonse renewals, points to a broader cooling in residential mobility.