Seoul apartment prices jumped by the largest margin in six years and nine months this week, rising 0.36% in just one week. If this pace continues, prices could surge more than 20% in a year. This month alone, prices rose 0.19% in the first week and 0.26% in the second, with the pace accelerating. Since the new administration took office, not just sale prices but also jeonse and monthly rents have all surged, showing clear signs of triple overheating. With all three rising at once, the housing crisis is hitting those without homes the hardest. The upward trend that began in Seoul is now spreading to areas like Gwacheon in Gyeonggi Province.
The main driver of soaring home prices is a supply shortage. With land transaction restrictions in place for Gangnam, Seocho, Songpa, and Yongsan districts, demand is spilling over into neighboring areas. Speculative buying is also picking up as buyers rush in ahead of next month’s tighter loan rules. The new government’s pledge to boost the economy through stimulus has further fueled the market. Growing expectations of price hikes are drawing in even people who did not plan to buy. Unless this panic is contained, the housing frenzy seen during the Moon Jae-in administration could return.
The government said on June 12 it would “review all available policy tools,” but no concrete plan has emerged. Housing prices are soaring, yet more than two weeks into President Lee Jae-myung’s term, there is still no framework for real estate policy. Officials cite delays due to vacant vice minister positions at the Land Ministry and the Financial Services Commission. However, on June 20, vice ministers were appointed at the Unification and Interior ministries. Lee has also named a finance vice minister to oversee the extra budget. So why is the most urgent housing-related deputy minister post still vacant?
Housing policy is all about timing. Miss the moment, and no fix will be enough. Among all the pressing national issues right now, none is more urgent than real estate.
