One apartment in Seoul buys three houses in Busan.
If you sell one apartment in Seoul, you can buy three apartments in Busan. In terms of real estate assets, one house owner in Seoul is equivalent to three houses in Busan. With skyrocketing prices with housing prices, Seoul, Korea is yawn even wider gap between the Moon Jae-in, bipolarization of housing prices appears to be a distinguished.
According to the Korea Appraisal Board’s data on the sale price of houses in the Seoul metropolitan area, the average selling price of apartments in Seoul was 881.83 million won as of July, as housing prices in the Seoul metropolitan area continued to rise this year. On the other hand, apartments in Busan were sold for an average of 297.86 million won, nearly triple the price of apartments in Seoul.
Compared to the eight major cities, Sejong was the second most expensive with 455.47 million won, followed by Incheon (321.07 million won), Daegu (313.04 million won), Daejeon (312.19 million won), Busan, Ulsan (240.57 million won), and Gwangju (234.75 million won). In particular, Seocho-gu, which has the most expensive apartment prices in Seoul, has reached an average of 1.751 billion won, enough to purchase six apartments in Busan.
The bipolarization of housing prices between Seoul and areas such as government turned out to be more serious, I’ve heard Moon Jae-in. In May 2017, when the Moon administration took power, the average sale price of apartments in Seoul was 570.28 million won, 2.2 times higher than that of Busan (256.99 million won).
Considering that Busan apartment prices were weak at the time when major areas of Busan, including Haeundae, Suyeong, Dongnae, Yeonje and Namgu, were grouped into areas subject to adjustment, the current gap is bound to feel even bigger. Although the price of apartments in Busan has been on a rebound since November last year when it was lifted from the adjustment area, the gap between apartment prices in Seoul and Busan is widening as housing prices in Seoul have soared much more sharply.
As the government’s high-intensity regulations across real estate transactions, including purchases, holdings and disposal, have made it more likely to focus on the so-called “smart house,” polarization between East and West is intensifying in Busan.
In Busan, the area with the highest apartment prices in July was Suyeong-gu, which sold for an average of 431.8 billion won. Subsequently, the prices of apartments in the eastern mountain region such as Haeundae (42.66 million won), Nam (358.58 million won) and Dongnae (354.53 million won) were high. On the other hand, Jung-gu, which has a large number of old apartments, had an average sale price of 147.33 million won, only one-third of Suyeong-gu. The sale price of apartments in Saha, Sasang (194.33 million won), and Yeongdo (196.11 million won) in the western part of the country were also less than 200 million won. The gap in apartment prices between Suyeong-gu and Jung-gu, which was 2.55 to 1 in the early days of the Moon administration, widened to 2.92 to 1 in July this year.
The price gap between high-priced and low-priced apartments in Busan also widened to a record high since the survey. According to KB Kookmin Bank’s monthly housing price trend data, the fifth-percentile scale of apartments in Busan stood at 4.4 last month, the highest since the related survey began in 2013. The fifth-percentile scale is the average price of the top 20 percent (5th percentile) divided by the average price of the bottom 20 percent (1st quartile) by dividing the housing into five parts in order of price. The higher the magnification, the greater the price difference between high and low-priced apartments.
The price of apartments in the first quarter of Busan averaged 119 million won last month, compared with 529.36 million won on average. In July 2017, the ratio for the fifth quarter was 4.0, with 124.62 million won for the first quarter and 49741 won for the fifth quarter. The gap is widening as the price of high-priced apartments is soaring while low-priced apartments are falling.
Experts say that as the government continues to regulate real estate, polarization between Seoul and non-capital areas nationwide, and popularity and unpopular areas is becoming more pronounced. For consumers, the increase in investment barriers is attributed to the so-called “money-making core areas” phenomenon, and increased uncertainties in the market, which focused supply on proven popular areas rather than unpopular areas.
“The gap in prices by region in Seoul, formerly represented by Gangnam and Gangbuk, is spreading nationwide, and this phenomenon will continue for a considerable period of time if the current regulatory policy continues,” said Kim Hye-shin, head of Solex Marketing Busan branch.