Asia Minute: Seoul’s Soaring Housing Costs

Feb 3, 2020

A recent study from the University of Hawaiʻi's Economic Research Organization shows rents in Hawaiʻi are more than 50% higher than the national average. In South Korea's capital, housing costs are also high — but rising even faster.

 


Apartment prices in Seoul have risen at the fastest pace in the world over the last three years. That word comes from an online database called Numbeo — cited by local media in South Korea.

It compares the prices of city-center apartments, and finds that, right now in that category, Seoul is the fourth most expensive location in the world — trailing only Hong Kong, Singapore, and London.

Another study out this week by South Korea's KB Kookmin Bank shows more than half of Seoul's apartments are valued at more than 900 million won — the equivalent of more than $750,000. That's a significant level because that's where higher taxes kick in, and where some restrictions are imposed on bank lending.

Those are part of efforts by the administration of South Korean President Moon Jae-in to rein in those higher housing costs.

Local media count up to 18 different sets of real estate measures that the Moon administration has put in place, including at least four targeted specifically at the housing market.

But despite initiatives such as restricting bank lending on more expensive units, there have been limited effects. The KB Bank study shows that the median price of housing in central Seoul has risen by more than 50% since Moon took office in May, 2017.