Seoul's outer districts see fewer 'mid-to-low price' apartments as values rise

The availability of "mid-to-low price" apartments, specifically the common 59-85 square meter units, is shrinking in Seoul's outer districts as housing prices continue their sharp ascent. Areas like Gwanak and Seongbuk have seen the proportion of these affordable homes fall below 50%, a stark contrast to just a year ago.

Analysis of government real estate transaction data reveals a notable trend in the first half of this year. Across nine outer districts, including Nowon, Dobong, Gangbuk, Geumcheon, Gwanak, Guro, Seongbuk, Jungnang, and Gangseo, transactions for 59-85 square meter apartments priced under 900 million won (approximately $650,000 USD) dropped by 8.7 percentage points compared to the same period last year. These affordable units now represent 68.3% of all transactions in these areas, down from 77.0% in the first half of 2023.

This shift indicates a rising threshold for first-time homebuyers and younger buyers relying on loans. The scarcity of affordable rental properties is also believed to be fueling demand for these mid-to-low priced apartments, driving up prices significantly in Seoul's outer regions. The changes are particularly dramatic in Gwanak and Seongbuk.

In Gwanak, the proportion of transactions for 59-85 square meter apartments under 900 million won plummeted by over 23 percentage points to 48.2% within a year. While overall transactions in Gwanak increased by 16.4%, those exceeding 900 million won more than doubled. Seongbuk saw a similar trend, with the under-900 million won share dropping from 67.1% to 48.6%, even as overall transactions decreased slightly but those above 900 million won surged by 41%.

However, districts like Dobong and Jungnang continue to show resilience, with over 90% of their 59-85 square meter apartment transactions remaining below 900 million won. Real estate experts suggest that price increases are occurring at different paces across Seoul, with outer areas like Dobong and Jungnang lacking new apartment complexes that typically drive higher-priced sales. This demand is increasingly being met by satellite cities in Gyeonggi Province.

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The price increases are occurring at different paces depending on the physical location within Seoul. In the outermost areas like Dobong-gu or Jungnang-gu, there aren't many new apartments to drive high-priced transactions, so sales demand is being dispersed to satellite cities in Gyeonggi Province.