Housing Prices Rise 3.1% in November

Housing prices across the country rose an average of 3.1% last month, which was the largest monthly increase in 16 years and seven months. According to the trend in house prices for November announced by Kookmin Bank on December 4, housing prices across the nation rose 3.1% from the previous month, which shows a 3% increase for the first time since April 1990(3.2%).

The increase in housing prices was led by the metropolitan areas of Seoul, Gyeonggi and Incheon. The rise in Seoul was 4.8%, which was the highest increase since February 1990(5.9%). Within Seoul, 11 districts in Gangnam rose 5.4%, while 14 districts in Gangbuk increased by 4.1%.

Housing prices in Gyeonggi rose 6.9% in November, which was a larger increase than in Seoul. In particular, Gwacheon and Guri rose sharply with a 15.0% and 14.8% increase, respectively.

The rise in different types of housing showed that apartments rose by 3.8%, semidetached houses by 3.3%, and detached houses by 1.1%.

Meanwhile, the Bank of Korea analyzed the reason for the recent jump in housing prices to be a large amount of money being circulated due to the regularization of land compensation for several development works.

According to BOK, the amount of money being circulated in Korea’s entire economy, including government and corporate bonds issued by the government and companies, as well as the amount of money registered for over two year long-term financial products, was 1,787.1 trillion won as of late October, which increased 8.3 trillion won (0.5%) from the previous month.

higgledy@donga.com jinhup@donga.com