Apartment Prices Up 11.4% By November

Apartment prices are expected to reach double-digit growth this year for the first time in four years since 2002.

According to a survey by Kookmin Bank on Wednesday, apartment prices rose 11.4 percent by the end of November this year. As the prospect of apartment prices falling is low, the prices are expected to record double-digit growth for the first time since it recorded 22.8 percent in 2002.

By region, prices in Seoul soared 19.7 percent, 24.6 percent in 11 districts in the south of Han River, and 12.6 percent in 14 districts in the northern part by the end of November. Gyeonggi Province surrounding the city of Seoul recorded 24 percent of price hikes, higher than Seoul. Among six metropolitan cities, Ulsan’s apartment prices rose 12.8 percent, higher than the national average, and those in Incheon increased 8.2 percent. However, the price growth rate in Daegu stood at only 1.3 percent, Gwangju at a mere 3.5 percent while Busan and Daejeon saw their apartment prices decrease by 0.8 percent and 1.9 percent, respectively. National housing price growth rate amounted to 9.6 percent as of the end of November.

With housing prices skyrocketing, the credibility of real estate research institutions has fallen as they predicted the prices to decrease earlier this year.

The state-run Korea Research Institute for Human Settlement forecasted that housing prices nationwide would fall by approximately 1.0 percent this year. Also, the Korea Housing Institute projected housing prices to fall by 2-3 percent this year.

“These institutions only considered speculation factor. As lease prices and new apartment prices soar, however, people who actually need a housing, not speculators, got anxious and scrambled to buy a house,” said Korea Housing Institute head researcher Goh Cheol.

higgledy@donga.com