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Rise or fall? All eyes on 2022 Seoul home prices

A view of apartment complexes in Seoul on Dec. 26, 2021 (Yonhap)
A view of apartment complexes in Seoul on Dec. 26, 2021 (Yonhap)

SEJONG -- The average trading price of homes in Seoul posted 39.99 million won ($33,500) per 3.3 square meters, which is equivalent to 1 “pyeong,” at the end of 2021, data from KB Kookmin Bank and Naver showed.

This indicates that the price for an 84-square-meter unit, a popular size in Korea, in the capital has surpassed 1 billion won on average.

In the capital’s priciest district of Gangnam-gu, the average price peaked at an all-time high of 70 million won per 3.3 square meters, as of Dec. 31, marking a 15.5 percent increase compared to Jan. 1, 2021.

As housing prices in Seoul and other major regions posted a record-breaking surge under the Moon Jae-in administration since May 2017, the main issue in the 2022 economy is whether the real estate market will stabilize this year. The next administration is set to take office on May 10.

A survey by property information provider Zigbang on 1,236 users of its mobile application showed 43 percent of respondents saying that housing prices in their residential areas will slide this year. About 38 percent predicted an increase.

The price fall forecast for 2022 comes amid slowed growth in housing prices in some districts of Seoul. In fact, some non-pricey districts of the capital saw home prices stop increasing in December 2021 in the wake of various government-led regulations. These regulations involved tough terms for taking out mortgages and rate hikes led by the central bank.

Nonetheless, recent reports from property-related research centers predicted that 2022 will mark another year of growth in home prices.

The Construction & Economy Research Institute of Korea and the Korea Housing Institute forecasted yearly increases of 2 and 2.5 percent nationwide respectively. In addition, the Korea Housing Institute expected a 3 percent growth in Seoul and 3.5 percent growth in the Gyeonggi Province-Incheon area.

Further, the Korea Research Institute for Construction Policy expected that apartment prices will climb 5 percent this year.

The ruling party‘s presidential candidate Lee Jae-myung has unveiled his stance of inducing active sale of homes held by multiple homeowners by enhancing the comprehensive real estate tax.

In contrast, the main opposition party’s presidential candidate Yoon Suk-yeol said he would carry out a full-fledged easing of tax burdens on homeowners.

By Kim Yon-se (kys@heraldcorp.com)
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