Seoul’s apartment prices rise for 34th week as pace picks up
Seoul apartment prices rose 0.19% in the week ended Sept 22 after gaining 0.12% the previous week
[SEOUL] South Korea’s property market extended its rally to a 34th week as the pace of gains accelerated despite government steps meant to cool prices, complicating the central bank’s case to lower borrowing costs to aid the economy.
Seoul apartment prices rose 0.19 per cent in the week ended Sept 22 after gaining 0.12 per cent the previous week, Korea Real Estate Board data showed on Thursday (Sep 25). The advance in prices underscores resilient demand despite tighter rules on mortgages.
The data come a month after the Bank of Korea (BOK) held its benchmark interest rate steady, citing rising household debt driven by mortgages as a key financial stability risk. Still, five of six board members said at the time they were open to a rate cut in the next three months, and the central bank said earlier this month that the Federal Reserve’s rate cut would give it scope to conduct monetary policy with a greater focus on growth.
Overall, apartment prices across Seoul climbed as buying interest grew, and transactions at higher prices were reported, particularly in sought-after complexes such as those under redevelopment, large-scale estates, and areas near subway stations, Korea Real Estate Board said in a statement.
The BOK next sets policy on Oct 23. Board member Hwang Kunil said on Tuesday that he’s undecided on whether to push for a move at that meeting or hold off, noting the central bank’s chief concern is not home values but the loans tied to them.
The BOK has cut rates four times since October 2024 but paused at its past two meetings as it weighed financial imbalances from rising debt and persistent gains in property prices in Greater Seoul.
Concerns about property valuations and the impact on household debt have kept the central bank from easing policy to bolster the economy as businesses contend with US tariffs. Under a July trade deal, the US imposes 15 per cent levies on imports from South Korea. The government has projected that economic growth will slow this year to the lowest pace since the pandemic-induced contraction of 2020.
The central bank warned Thursday that tariffs, prolonged industrial weakness and housing imbalances could undermine financial stability. While government steps have curbed debt growth, price expectations in Seoul remain elevated, it said.
President Lee Jae Myung’s administration has imposed fresh restrictions on the real estate market, including caps on mortgage lending in the capital region and limits on foreign purchases. BLOOMBERG
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