“Have Home Prices Really Gone Crazy?” ... All Have Surpassed 2021 Levels Under the Moon Administration [Real Estate A to Z]

[Financial News] 2021, under the Moon Jae-in administration, was a year when home prices skyrocketed. The so-called “regulatory paradox,” in which regulations instead fueled the market, swept across the nationwide housing market.
This year, Seoul’s housing market, where regulations have been concentrated, has been showing an unusual trend. By September, the cumulative rise in Seoul apartment sale prices this year had finally surpassed the 2021 figure.

Let’s look at the September monthly apartment price statistics recently released by the Korea Real Estate Board (KREB). From January to August this year, the cumulative rise in Seoul apartment prices was 7.52%. Prices jumped about 0.8% in September from the previous month, bringing the cumulative rise from January to September to 8.32%.

The cumulative rise of 8.32% over nine months surpassed the full-year increase in Seoul apartment prices in 2021 under the Moon administration. According to KREB, Seoul apartment prices rose 8.02% in 2021.
One expert said, “The scorecard for Seoul home prices over the first nine months of this year has already surpassed the worst reading from 2021,” and analyzed, “Taking the remaining months into account, an annual increase of around 10% is expected.”
By contrast, the cumulative rise from January to September this year in Gyeonggi Province, Incheon and other regions outside Seoul fell well short of the 2021 figures. Incheon, for example, saw prices rise 24% in 2021, but they have risen just 0.7% this year.

The Seoul apartment jeonse market shows a similar trend. During the 2021 boom, Seoul apartment jeonse prices rose 6.48% for the year. On a cumulative basis, this year’s increase had already surpassed the 2021 rate by August. The rise through September was 8.21%. The jeonse market in Gyeonggi Province, Incheon and other regions is also far from 2021 levels. Seoul is out in front in both home sales and jeonse.

The apartment monthly rental market is even more severe. Seoul apartment rents rose 2.53% in 2021. This year, they had risen 7.68% by September—already about three times as much. The average monthly rent for a Seoul apartment also rose from 1.64 million won in August to 1.66 million won in September.
Adding to the concerns, warning signs are emerging in the villa market. In 2021, when home prices skyrocketed, Seoul villa sale prices rose 4.13% and jeonse prices rose 3.19%. Notably, it was the first time villa sale prices had risen 4% since the New Town frenzy of 2007–08.

Take Seoul villa sale prices this year: they had risen a remarkable 7.34% by September. Jeonse prices also jumped 4.72%, surpassing the full-year 2021 increase. In Seoul, both sales and rental markets for apartments and villas alike have now exceeded the figures from the 2021 boom.
[email protected] Lee Jong-bae Reporter