Seoul's average apartment price tops $1m

Gap between priciest and cheapest apartments nationwide reaches new high

Apartments in sourther Seoul. (Yonhap)

Rising home prices in Seoul pushed the city’s average apartment price beyond 1.4 billion won ($1 million) for the first time, data showed Monday.

KB Kookmin Bank’s monthly real estate report showed that the average price of apartment homes in Seoul reached 1.45 billion won in July, marking a 1.28 percent increase from the previous month. The figure climbed past the 1.4 billion won mark just three months after surpassing 1.3 billion in April.

Apartment prices averaged 1.76 billion won in Seoul’s 11 districts south of the Han River, which bisects the city, while those in the 14 northern districts stood at 1 billion won. It was the first time average prices for apartments north of the river exceeded 1 billion won since November 2022.

Despite the continued price growth, the pace has slightly slowed from last month’s 1.43 percent increase, which was the steepest monthly rise since September 2021, when prices jumped 1.69 percent.

The index that measures expectations for future price changes, created by the bank, also showed signs of a possible slowdown. It fell to 98.0, down 35.9 points from 133.9 the month before.

This index is based on surveys of local real estate agents. A score above 100 means people expect prices to go up, while a score below 100 means they expect prices to go down.

Figures for Incheon and Gyeonggi Province also dipped below 100, posting 94.6 and 96.9, respectively.

Experts suggest that the downward outlook for home prices is largely attributed to the government's stricter mortgage regulations implemented on June 27 to curb surging household debt and housing prices. The measures cap home-backed loans for purchases in the capital region at 600 million won and suspend such loans for multi-home owners.

However, tighter regulations on homeownership appear to have fueled a growing tendency among buyers to concentrate on a single, high-end apartment, deepening polarization in the local housing market.

This month, the nationwide apartment price quintile ratio, which divides homes into five groups by price and compares the average prices of the top 20 percent and bottom 20 percent, reached 12.0, the highest level since monthly records began in December 2008, data showed.

Seoul's ratio came in at 6.5, marking the sharpest housing price divide ever recorded in the city.