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July 26, 2021

Surging apartment prices prompt exodus from Seoul

PUBLISHED : July 08, 2021 - 18:07

UPDATED : July 08, 2021 - 18:07

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Apartment complexes in Seoul (Yonhap)

With apartment prices soaring in the South Korean capital of Seoul, a growing number of residents are leaving the city for its surrounding areas, data showed on July 8.

According to data from Statistics Korea, from January to May, an average of 8,823 people moved out of the city each month. The agency forecast that the total net outflow for 2021 would reach 100,000.

This contributed to overall changes in population. While Seoul’s population declined by 102,475 in the last six months, Gyeonggi Province saw its population increase by 73,654 over the same period.

“A large number of people have left Seoul to settle in the Seoul metropolitan area, including Gyeonggi Province and Incheon, where commuting to the capital city is possible. Housing-related issues are the main drivers of the recent exodus,” said Choi Seul-gi, a professor at the Korea Development Institute School of Public Policy and Management.

As of June, the average selling price of a small apartment in Seoul had surged by nearly 100 million won ($87,400) since December last year to reach some 1.1 billion won, gaining some 10 percent during the period. The price of an average jeonse deposit for an apartment, refundable under a two-year lease, soared by 17.8 percent to 626 million won, according to a report on monthly housing price trends released by KB Kookmin Bank.

The recent exodus from Seoul has raised apartment prices in areas surrounding the capital, reducing the chances for low- and middle-income earners hoping to buy homes in those areas.

The average purchase price for a residence in Gyeonggi Province rose by 25.18 percent on-year to 530 million won in June, and the price of jeonse increased 15.89 percent over the previous year.

“The government should stabilize housing prices by expanding the housing supply for low- and middle-income people living in metropolitan areas,” said Ham Young-jin, chief of the big data research lab under property platform company Zigbang.

By Choi Jae-hee (cjh@heraldcorp.com)

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