"If you go there, you’ll never come back"... the 1.5 Billion Won Wall of Lamentation

[The Financial News]

A new era has opened in which one out of every three apartments in Seoul is a high-priced home worth more than 1.5 billion won. In the three Gangnam districts, it has already become difficult to find units priced below 1.5 billion won, while in outer areas many homes still struggle to break the 1 billion won mark. The polarization of Seoul’s housing market is now clearly visible in the numbers.
According to an analysis conducted by Real Estate R114 at the request of The Financial News on the 20th, high-priced homes exceeding 1.5 billion won accounted for 34.6% of all apartments in Seoul last year. In other words, roughly one out of every three apartments is now a member of the so‐called "1.5 billion won club."
By price range, 65.4% of units were at or below 1.5 billion won, 19.6% were between 1.5 billion and 2.5 billion won, and 15.0% were above 2.5 billion won.
By district, in Seocho District 9 out of 10 apartments (89.0%) exceeded 1.5 billion won. It was followed by Gangnam District at 87.9%, Yongsan District at 82.0%, and Songpa District at 70.9%. Seongdong District (59.7%) and Gwangjin District (56.4%) have also already crossed the halfway mark.
In contrast, Nowon, Dobong, and Gangbuk districts had zero apartments priced above 1.5 billion won, while Gwanak, Geumcheon, and Jungnang districts each recorded less than 0.5%.
The increase in high-priced homes is a clear trend. In 2020, apartments exceeding 1.5 billion won accounted for only 20.78%, but in just five years that share has climbed to 34.6%, a rise of 13.8 percentage points. The average price level of homes in Seoul has effectively shifted upward.
The price gap is striking in numerical terms as well. According to KB Real Estate, the quintile multiple stood at 6.89 times as of December last year, the highest level on record. The average price of apartments in the top 20% was 3.43849 billion won, while the bottom 20% averaged 498.77 million won. In effect, you would need to sell about seven low-priced apartments to buy a single high-priced one.
The key problem is mortgage lending. Following the October 15 Housing Market Stabilization Measures, mortgage limits were capped at 600 million won for homes at or below 1.5 billion won, 400 million won for those between 1.5 billion and 2.5 billion won, and 200 million won for homes above 2.5 billion won. With one out of three apartments in Seoul already priced over 1.5 billion won, trading up from outer areas to central districts has effectively become a ladder blocked by regulation.

act@fnnews.com Choi Ah-young Reporter