Seoul housing gains shift to outer districts

The Korea Real Estate Board’s August data showed Seoul’s overall housing prices rose 0.97% from July, led by outlying districts. Seongbuk climbed 1.83%, up from 1.73% the previous month, while Nowon rose 1.77% and Seodaemun 1.64%. Seongbuk’s home prices are up 14% this year, and some districts in the northern and western fringes are seeing record highs.

The move is being driven less by speculative luxury buying than by what local brokers are describing as “survival buying” — households forced out of the jeonse rental market and into purchase decisions by a lack of rental listings and rising deposit costs. In Seoul, the spread between house prices and jeonse deposits remains relatively narrow in these lower-priced areas, making ownership look like the less painful option. That dynamic is especially visible in Seongbuk, where the jeonse price index jumped 1.54%, the fastest in the city, alongside strong increases in Nowon, Dobong and Geumcheon.

The shift helps explain why Seoul’s market has stayed elevated despite tougher regulation. Authorities have tightened mortgage lending on homes above 1.5 billion won, reinstated heavier capital gains taxes on multiple-home owners and signaled higher holding-tax pressure on expensive properties. Those measures have helped soften top-end prices in Gangnam, but they have not cooled the broader market because demand has rotated into the 10 billion won to 1.5 billion won band, where Seoul has the largest stock of housing.

President Lee Jae-myung said on Thursday that declines in Gangnam and other wealthy districts were helping flatten the market, even as outer districts continued to rise. His office said it was taking seriously the burden of price gains outside Gangnam’s three affluent districts, blaming limited new supply in northern Seoul and the pull of mid-priced homes that are less exposed to tax and lending curbs.

That framing is important for investors because it suggests the government’s next policy response may tilt toward supply rather than further demand suppression. Opposition lawmakers are already pushing for more aggressive deregulation of redevelopment and reconstruction, while the administration is under pressure to stabilize housing without worsening the rental squeeze. If supply remains tight, price inflation is likely to persist at the lower end even if Gangnam continues to weaken.

The broader narrative is that Seoul housing is not simply rising or falling; it is normalizing upward across districts. The capital’s median home price has topped 800 million won for the first time, and the market’s lower boundary has moved higher as renters become buyers of last resort. For households, that means the barrier to entry is rising. For investors, it means the key risk is no longer just a correction in trophy assets, but a persistent affordability-driven bid in the mid-market that keeps Seoul prices structurally sticky.