By Jung Yeon-Tae,
President of the Korea Information Service of the Construction Industry and Essayist.
Housing prices in Seoul show little sign of stabilizing. The government has repeatedly introduced stronger lending regulations, adjustments to property holding and capital gains taxes, and expanded supply measures, yet many argue that the tangible impact remains limited.
The issue may not be the intensity of policy, but rather whether the diagnosis of the market structure itself is misguided. It raises the question of whether it is appropriate to approach Seoul’s housing prices under a single frame of “nationwide housing insecurity.”
4.5 Million Households in Seoul, but Not One Market
Seoul has approximately 4.5 million households. Of these, about 2.1 million are owner-occupied households, while roughly 2.4 million live in jeonse or monthly rental arrangements.
Policy discussions and media narratives often treat “Seoul home prices” as a single concept. However, analysis suggests that the market is in fact divided into two fundamentally different segments.
Seoul contains around 1.7 million apartment units. Among them, approximately 350,000 units are high-priced apartments with transaction values exceeding KRW 1 billion, representing about 10% of total apartments and 17–21% of owner-occupied households.
In other words, the primary force driving up Seoul’s average home price is not the entire population of 2.1 million homeowners, but a subset of the high-end apartment market. The 2.4 million non-homeowner households are argued to have a limited direct connection to this segment.
Few Transactions, Rising Prices: The Structure of an “Asking-Price Market”
Annual apartment transactions in Seoul total roughly 70,000 to 90,000 cases, equivalent to about 5% of the total housing stock.
This implies that 95 out of 100 apartments do not change hands within a year. Nevertheless, prices are widely perceived to be on an upward trend.
Experts describe this phenomenon as “price formation without transactions.” Market prices are shaped less by completed deals and more by asking prices—the figures sellers put forward.
In high-end apartment complexes priced above KRW 1 billion, internal price expectations are said to play a decisive role. The withdrawal of lower-priced listings, the maintenance of high asking prices, and the presentation of price levels irrespective of actual transaction closure contribute to a fixation of “expected prices.”
In such cases, preserving the benchmark price takes precedence over concluding transactions. Even with limited actual sales, asking prices shape market sentiment, which in turn feeds into average price statistics.
Of 2.1 Million Homeowners, Which Homes Actually Move the Market?
Seoul has approximately 2.1 million owner-occupied households. Yet the homes that materially influence price formation are estimated to be roughly 400,000 high-end apartment units.
The remaining 1.7 million units display stagnation or divergent trends depending on region and price tier.
Another defining feature is the identity of buyers. Based on brokerage data and transaction statistics, an estimated 70–80% of purchasers of apartments priced above KRW 1 billion are existing homeowners. This suggests that upgrade demand and asset reallocation demand dominate the segment.
Among the 2.4 million rental households, the proportion directly entering the high-end apartment market is considered extremely low. As a result, price increases appear to occur primarily within asset-owning groups.
The Trap of Averages: When Statistics Distort Policy
When Seoul’s average home price rises, policy is typically designed in response to that metric.
However, if the increase is concentrated in the high-end apartment segment, debate emerges over whether uniform regulations should apply equally to mid-priced single-home owners or non-homeowners.
Treating high-end asset markets and owner-occupier housing markets as a single entity may lead to broad-based lending restrictions and tax increases that blur policy targets.
Unless the segmentation of the market is acknowledged, policies may grow increasingly stringent while their perceived effectiveness remains limited.
Is It Policy Failure or Structural Reality?
Rather than defining current price increases solely as policy failure, some argue that attention should focus on the discrepancy between the market policymakers aim to regulate and the market where prices are actually formed.
If the government’s objective is housing stability for non-homeowners, it must recognize that the high-end apartment segment—where price formation is concentrated—is structurally separated from the intended policy beneficiaries.
Seoul’s housing issue cannot be fully explained by supply shortages or speculative psychology alone. An analytical framework that treats an already differentiated market as a single structure may itself be constraining policy
effectiveness.
Conclusion
It is difficult to argue that rising home prices in Seoul are experienced uniformly by all citizens.
Yet policy continues to presume “Seoul as a single market.” Unless this structural gap is addressed, stronger measures and recurring debate are likely to persist.
The discussion surrounding housing prices may need to shift from “how much have prices risen?” to a more structural question: “Who is actually setting the prices?”
Sources
Statistics Korea, “Projected Household Estimates and Housing Tenure Statistics”
Ministry of Land, Infrastructure and Transport (MOLIT), “Annual Housing Transaction Statistics”
MOLIT Real Transaction Disclosure System
KB Real Estate, “Housing Price Trend Time-Series Data”
Korea Real Estate Board, “Housing Price Trend Survey”
Seoul Metropolitan Government, “Seoul Housing Survey and Ownership Status”
Compiled data from major high-end apartment transaction cases and brokerage field materials
About the Author
Jung Yeon-Tae is the President of the Korea Information Service of the Construction Industry. He completed his master’s and doctoral coursework at Stevens Institute of Technology in the United States and spent 26 years in the New York–New Jersey region as an entrepreneur in information, technology, and industrial sectors.
After returning to Korea, he served as CEO of Koscom and Vice Chairman of the Economic Research Institute at Samjong KPMG. He currently leads a public institution under the Ministry of Land, Infrastructure and Transport, researching housing, construction, and real estate policy. Drawing on hands-on brokerage experience, he writes analytical pieces that integrate statistical data with market structure insights and is also active under the pen name “Manripungchwi.”
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