H. Yoo
Research expert covering South Korea
Real estate in South Korea - statistics & facts
The real estate market in South Korea saw heavy uncertainty in the past years with fears of a recession and the hiking of interest rates to combat inflation. 2022 saw the mortgage rate for new loans rise to break the four percent mark, reaching a peak of 4.73 percent. However, it has since seen an incremental decline throughout 2023. For the domestic real estate market though, the previous rise had meant a drop in both apartment prices and the number of real estate transactions nationwide as fewer households were willing to take on the high interest rates on newly extended loans in general.
Apartment prices in Seoul
Just a few years prior, the property market in Seoul was considered among the most expensive in the world, comparable to those of other major cities such as Shanghai and Paris. However, from December 2021 to December 2022, the mean purchasing price for apartments in South Korea recorded a considerable drop. Seoul had the largest share of highly-priced dwellings in the country, having 66 percent of the country's apartments worth over 900 million South Korean won, as of 2023. In comparison, the share of apartments of the same value in the five largest cities after Seoul combined stood at only seven percent. Within Seoul, Gangnam was the most expensive area to live in, with an average selling price of over 2.2 billion KRW for apartments.Housing policies
Most people in South Korea believe that property prices will continue to fall in the coming year as the long-term consequences of central bank interest rate hikes continue to ripple through the market. With over half of household wealth tied to housing and real estate, more people were dissatisfied than they were satisfied with the current government’s real estate policy. To alleviate the weakened purchasing power for households, the current administration is expected to relax regulations and expand the current housing supply in the coming years.
