Seoul’s housing prices rise more in 1st two years of Yoon government than in five years of previous administration

The growth rate of housing prices in Seoul during the two years of the Yoon Suk-yeol administration was higher than that during the first two years of the Moon Jae-in administration. The difference between the actual transaction price and the declared value of houses also widened.

According to a report released by Lee Yeon-hee, Democratic Party of Korea lawmaker, and the Korea Center for City and Environment Research on October 6, the average sales price of houses in Seoul rose from 660.63 million won in the first half of 2022 to 918.26 million won in the first half of this year, an increase of 39 percent during the two years of the Yoon administration.

This is higher than the rate of increase in the first two years of the Moon administration (17.9 percent). It is also higher than the growth rate during the five years of the Moon administration (31.3 percent). The average price of houses in Seoul rose from 538 million won in the first half of 2017 to 594.21 million won in the first half of 2019.

This suggests that the government's measures to stabilize housing prices are not working well in the market, even considering that the ongoing Russian-Ukrainian war has led to a rise in construction raw material prices since Yoon took office.

However, in the first half of 2022, which is the baseline for the rate of increase during the first two years of Yoon's government, the actual increase rate may be lower because the rate of decline in sales prices compared to the second half of 2021 was large. In addition, the data did not reflect the sharp rise in housing prices in the second half of 2019, during the Moon government, as the period was divided into "the first two years of a new government."

If it is limited to apartments in Seoul, the growth rate over the first two years of the Yoon government was only 14 percent. This is lower than that of the Moon administration (35.2 percent) and the growth rate of the following two years of the Moon government (34.4 percent).

Under Moon, Seoul apartment prices jumped from an average of 656.85 million won per unit in January 2020 to 1.04 billion won by December of that year. By the end of his term, in April 2022, it rose to 1.15 billion won.

The Yoon administration attempted to “lower housing prices,” but Seoul’s apartment prices, which fell to 811.6 million won in August 2022, have since shown a steady upward curve, rising to 1.12 billion won in August 2023 and 1.25 billion won in 2024.

Lawmaker Lee pointed out, "Housing prices have reached a new all-time high in two years since the inauguration of the Yoon government, causing instability in the real estate market. We need to come up with special measures to stabilize housing prices."

Meanwhile, the gap between the actual transaction prices and the declared value of houses also widened. While the actual transaction prices of houses across the country, including Seoul, rose significantly between 2022 and 2023, the rate of increase in declared value of houses this year has not been able to keep up with it.

Last month, the government announced that it would abolish the "Roadmap for Realization of Declared Value of Houses," which has been promoted by the Moon government, and change the calculation method to reflect only market price fluctuations.

The average actual transaction price of houses in Seoul rose 9.3 percent from 969.88 million won in 2022 to 1.06 billion won in 2023. During the same period, the average declared value of houses fell 19.4 percent, from 818.5 million won to 659.5 million won. This year's average declared value of houses stood at 683.8 million won, up only slightly (3.7 percent) from the previous year.

The reflection rate of actual transaction price also decreased from 79.2 percent to 71.9 percent.

In addition, as the tax rate and taxation standards were lowered due to the revision of the tax law related to the holding tax, the holding tax fell from 6.18 million won to 4.13 million won, and the effective tax rate fell from 0.35 percent to 0.21 percent.

Hong Jeong-hoon, a researcher at the Korea Center for City and Environment Research, said, “The Yoon administration is focused on boosting the private sector-led real estate economy by easing various regulations and taxes. The government is not doing its job properly when an active public-led housing supply intervention is needed.”

※This article has undergone review by a professional translator after being translated by an AI translation tool.