Oh Se-hoon says Seoul housing market is leveling up, not leveling out

Seoul Mayor Oh Se-hoon pushed back Wednesday against characterizations that the city's housing market is "flattening out," arguing instead that prices are leveling upward. While some areas of Gangnam are seeing corrections, rising prices in relatively affordable districts such as Seongbuk-gu, Nowon and Jungnang are widening the overall housing cost burden across Seoul, he said.

Speaking at a press conference marking his 100th day in office, Oh said the word "flattening" carries a connotation of prices stabilizing downward — and that is not what is happening now.

He acknowledged that prices in Gangnam-gu and Seocho-gu have fallen over roughly eight weeks since the second week of August, but said the picture looks very different elsewhere. "During the same period, Seongbuk-gu rose 3.18 percent, and Seodaemun, Jungnang, Nowon and Gangbuk-gu also posted significant gains," he said.

"The pace of increases across Seoul as a whole is far greater than the pace of declines in Gangnam," Oh said. "I don't think it is appropriate to describe a situation where relatively lower-priced outer areas are rising as flattening."

Oh also pointed to rising jeonse prices as a factor squeezing ordinary residents. He said Seoul jeonse prices climbed 1.34 percent over the same period, with particularly sharp increases in outer areas including the northeastern districts.

"These are the numbers that are making life hardest for ordinary people," he said. "It is already difficult to buy a home or find a jeonse unit — and even when you manage to find one, prices are high and monthly rent burdens have grown. That is the reality in Seoul right now."

Oh said stabilizing the market requires actively drawing out private housing supply. He noted that redevelopment and reconstruction projects account for a large share of Seoul's housing pipeline, with the private sector contributing roughly 90 percent and the public sector about 10 percent. "There are limits to solving Seoul's supply problem through public-sector-centered supply alone," he said.

The Seoul Metropolitan Government plans to continue pressing the central government to ease regulations on private redevelopment and reconstruction projects. It also sees a need to expand tax and financial support to boost the supply of privately operated long-term rental housing.

"To revitalize private long-term rental housing, we need to create investment incentives through tax and financial benefits," Oh said. He added that overseas capital — including Canadian pension funds — has been eyeing the Korean real estate market favorably but is holding back for now.

"Even modest incentives could be enough to shift Seoul's rental market toward a supply surplus," he said, adding that the government has long hesitated on this front.

Oh said he plans to raise private supply as a key agenda item when he meets with the new Ministry of Land, Infrastructure and Transport minister. "I have already requested a meeting since the minister has changed," he said. "When we meet, I will again ask for tax and financial support to revitalize private redevelopment projects and long-term rental housing."

Oh also said the city would expand its support for apartment remodeling projects. While acknowledging that remodeling has limitations compared with full reconstruction — both in improving living conditions and in increasing the number of units — he said his administration saw no reason to leave it unattended.

"As regulations on redevelopment and reconstruction were eased, many complexes that might have gone the remodeling route switched to reconstruction, and during that process we held back from putting policy weight on remodeling," he said. "Going forward, I have directed the city to help where it can on the same terms as reconstruction and to put in place the necessary incentives."

Oh drew a line at criticism that individual review committee members are causing project delays during the redevelopment approval process. He said he would look into how frequently such complaints actually arise, but added that he finds it hard to agree with the characterization of systematic review delays.

"If urban planning reviews used to take six months to a year, since the introduction of integrated reviews some cases are decided in as little as a month, and many within a few months," he said. "More recently, we have been conducting pre-consultations before formal reviews to resolve potential sticking points in advance, so that a conclusion can be reached in a single review session."