Local housing prices have soared recently due to balloon effects from real estate regulations and difficulties in chartering due to the new lease law, but they have been concentrated only on apartments in some areas, including high prices. In particular, Ulsan and Gwangju saw their apartment prices rise sharply in the top 20 percent range, while those in the bottom 20 percent fell. Experts point out that soaring housing prices caused by policy side effects are deepening polarization in the local property market.
According to statistics released by KB Real Estate in November, the ratio of apartments in the fifth-largest metropolitan city hit a new high of 5.0. The fifth-percentile scale refers to the average price of apartments in the top 20 percent (5th percent) divided by the average price of apartments in the bottom 20 percent (1st percentile). In other words, the average price of the top 20 percent apartment is five times that of the bottom 20 percent. It is the first time that the gap in apartment prices in the five major metropolitan cities has widened to this extent since related statistics began to be compiled in 2013. The average selling price of apartments in the top 20 percent of the five metropolitan cities in November, or the “fifth-percentile” apartment, is 577.08 million won. On the other hand, the average price of the “first-tier” apartment, which is in the bottom 20 percent, was 115.12 million won, slightly more than 100 million won.
By region, the dominance of the upper-class apartments is revealed. Busan, where five districts have recently been subject to regulations, has a 5.1-percent scale. In particular, the average price of the top 20 percent apartment surpassed 600 million won for the first time in November. Considering that the average price of a fifth-percentile apartment in Busan was 52.24 million won until October, it jumped 9.33 percent in just one month. On the other hand, the average price of apartments in the bottom 20 percentile rose only 0.61 percent from 118.79 million won to 119.51 million won. In other words, only expensive apartments are priced up and affordable houses are left out of the upward trend in housing prices.
In other metropolitan cities such as Ulsan and Gwangju, polarization is more serious. While apartments in the high price range recorded the highest ever increase rate, those in the lower 20 percent section saw their prices fall.
Ulsan’s top 20 percent apartment sales rose more than 20 million won to 471.4 million won in November from 450.18 million won in October. The rate of increase reaches 4.71%. The increase was far higher than the 1.96 percent increase in the previous month. However, the average price of apartments in the bottom 20 percent dropped from 90.95 million won in October to 90.94 million won in November.
The same goes for Gwangju. The price of apartments in the fifth quarter of Gwangju rose 15 million won from the previous month to 541.43 million won. The rate of increase is 2.79 percent, well more than double the previous month’s rate of 1.07 percent. In contrast, 정품비아그라 the price of apartments in the bottom 20 percent fell 0.85 percent from 14.75 million won in October to 10.86 million won in November.
Experts predict that the polarization of real estate will worsen. Seo Jin-hyung, a professor at Kyungin Women’s University (Chairman of the Korea Real Estate Association), said, “The local real estate market has overheated, but as the heat is concentrated in some popular areas and complexes, only the places where it rises are rising are expected to continue this trend and the polarization within local real estate is expected to intensify.”