Rising Seoul home prices drive out citizens

By Choi Sung-jin

The average apartment price in Seoul has exceeded 550 million won for the first time.

According to KB Kookmin Bank, the price in the capital city was 552.82 million won ($461,452) in January, up 28.07 million won from December.

This is the first time the average apartment price has exceeded 550 million won in the entire time the nation’s largest commercial bank has been conducting the survey, which started in December 2008. The previous high was 545.59 million won in June 2011, the bank said.

The average price in the 11 districts south of the Han River, known collectively as the Gangnam area, was 661 million won, while that in the 14 districts north of the river that bisects this megalopolis, or the Gangbuk area, was 425.6 million won. Apartment prices rose sharply in January because the bank included in its tally new apartments sold in the month at high prices.

The cost of leasing homes, a payment called “jeonse” here, in the capital city also soared to 397 million won, on average, a whopping 150 million-won increase over the past four and a half years. “The dearth of rental homes will likely continue to push up the rents,” said a real estate expert at the bank. “The rapidly narrowing price gap between purchasing and leasing homes will also lead more people to buy homes, maintaining the sale price at high levels.”

The record-high home prices in Seoul are driving out more people to the surrounding Gyeonggi Province or further.

According to a population movement report released by City Hall on Tuesday, 1,727,000 people moved out of the capital city last year, some 137,000 more than the 1,589,000 people who moved in.

Nearly half (49.2 percent) of those who moved cited housing problems, such as lease expiry, changes in their home space or urban redevelopment. Among others, 22.5 percent moved out because of family reasons such as marriage or separation from parents, and 17.5 percent did so for vocational reasons, including landing jobs and starting businesses.

Most people who moved from Seoul to Gyeonggi Province also cited residential problems because they could not afford the skyrocketing rent and found new homes in the suburban areas for purchase or lease.

Of the 25 autonomous districts in Seoul, people moving in exceeded those who moved out in only two districts - Seodaemun and Gangseo - while the outgoing people surpassed new residents in 23 other districts, the report said.