SHARP INCREASE IN SEOUL APARTMENT PRICES

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The overheated real estate market has been a concern in recent days. A recent survey shows the average transaction price of apartments in the capital Seoul rose 40% in the past 3 years. Prices sharply rose not only in the affluent Gangnam area, but also in some Gangbuk areas north of the Hangang River.

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Here is an apartment complex in Seoul's Mapo district. An 85 square meter unit cost just over one billion won in 2017, but it sold for just over one and a half billion in the latter half of this year. A real estate information company has analyzed the actual transaction prices of all Seoul apartment units traded since January 2017. The average cost jumped 40% from 585 million won to 823 million. By district, Gangnam-gu saw the steepest increase of 53%, followed by Jongno, Gwangjin, Yongsan and Seodaemun. These areas outside of Gangnam recorded around 50% rises - higher than the typically more affluent southern districts of Seocho and Songpa. The data contradicts government explanations that higher home prices are reported only in certain regions where high-end apartment complexes are located. The price hike has persisted despite continued government measures since 2017 to rein in the overheating real estate market.

[Soundbite] KIM EUN-JIN(BUDONGSAN114) : "It's hard to deny the so-called "paradox of regulations" as home prices take a hit when regulations are first introduced but then eventually rise again."

The transaction volume of Seoul apartments which decreased after the September 2018 real estate measures were introduced has again risen this year. Some 35-thousand transactions took place in the second half of 2019, already surpassing last year's figure for the same period. The latest survey was somewhat affected by different time comparisons and regional characteristics. For instance, in some areas, transaction prices increased far more sharply due to redevelopment and new construction.