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Seoul Apartment Prices Surge, Hitting Record Highs Despite Market Restrictions
Seoul, South Korea – August 6, 2024 – South KoreaS apartment market is experiencing a stark divide, with ultra-high-end properties continuing to reach record prices even as overall transaction volumes plummet following recent mortgage restrictions. A recent transaction at the ‘Raemian One Bailey‘ complex in Seocho-gu, Seoul, exemplifies this trend.
On December 28, 2023, a 133.95㎡ unit at Raemian One Bailey was sold for 8 billion won (approximately $6.1 million USD based on current exchange rates), equating to 261.4 million won per 3.3㎡ (approximately $198,000 USD per pyeong). This transaction set a new national record for apartment prices based on per 3.3㎡,marking the beginning of the “200 million won per pyeong” era in the Korean housing market.
Further illustrating the trend, in March 2024, a standard 84㎡ apartment nationally was traded for 7 billion won (approximately $5.3 million USD), also exceeding the 200 million won per pyeong threshold.
The market shift follows the implementation of new regulations on June 27, 2024, which lowered the maximum mortgage limit to 600 million won. While these measures aimed to cool the market, they have instead exacerbated polarization, leading to a significant drop in overall transactions alongside continued price increases for premium properties.
An analysis by real estate data firm Zipthos revealed that apartment transactions exceeding 2 billion won decreased by 85.8% in the month following the June 27 measures. However, the renewal rate for these high-priced properties reached 66.1%, the highest across all price segments, indicating strong demand for luxury units. Specifically, two out of every three apartments listed at these prices were resold at or above their initial asking price.
Lee jae-yoon, CEO of Zipthos, described the current market as one of “stagnation and overheating,” where loan restrictions have curtailed broader market activity, but demand remains concentrated on high-end, newly constructed, and reconstructed complexes. He noted that this focused demand is driving up prices in these select segments. The Raemian One Bailey complex, developed by Hyundai Engineering & Construction, is a prime example of this trend, located in the affluent Seocho district of Seoul.
The Ministry of Land, Infrastructure and Transport (MLIT) is currently evaluating the impact of the June 27 measures and considering potential adjustments to address the widening gap between
