Seoul: Seoul apartment prices have risen for 85 straight weeks, underscoring calls for faster housing supply as demand controls fail to cool the market. According to Yonhap News Agency, Seoul apartment prices are poised to set a record for the longest sustained rise, climbing for 85 consecutive weeks from the third week of January last year through the fifth week of August this year.
This streak ties the record set under the Moon Jae-in administration, yet the current increase has been notably steeper. Over the latest 85 weeks, prices have risen by a cumulative 15.84 percent, more than double the 7.69 percent increase recorded during the Moon-era streak. This represents the largest hike since the Korea Real Estate Board began compiling statistics, with the potential to break records in the first week of September.
The government's strategy of suppressing demand has reached its limits, as lending has been tightened and heavier taxes imposed on owners of multiple and non-occupied single homes, yet prices continue to rise. Despite promises of three supply packages delivering 1.58 million homes, few will be completed during the current administration, leading to an inevitable near-term supply shortage. The restrictions are narrowing paths to homeownership, while both jeonse (lump-sum deposits) and monthly rents are increasing.
In districts such as Gangnam, Seocho, Songpa, and Gangdong, apartment prices fell following a tax revision plan announcement, but demand is shifting to other areas. Although the government softened parts of its tax proposal amidst concerns, the framework of heavier taxation remains.
The editorial stresses the necessity of expanding supply and restoring market functions. Regulations on redevelopment and reconstruction, essential for urban housing, should be eased decisively. Punitive taxes encouraging panic buying and exacerbating rental shortages, along with lending restrictions on genuine homebuyers, require revision. The focus should shift away from controversial sites like Yongsan Park and the Gwacheon racetrack.
A KB Kookmin Bank simulation suggests that if prices continue to rise, nearly all Seoul homes outside the Gangbuk, Geumcheon, and Dobong districts could be subject to the comprehensive real estate holding tax by 2030. Despite this, President Lee Jae Myung has indicated that Korea should prepare for a potential housing price collapse, leaving the public puzzled.
High interest rates may restrain prices, but without resolving shortages, controlling housing costs in densely populated Seoul will remain challenging. The government must transition from planning to executing a comprehensive supply drive that delivers tangible results. Confidence in a consistent home supply is ultimately what can stabilize prices.