According to data from KB Kookmin Bank and Naver, the average trading price of homes in Seoul reached 39.99 million won ($33,500) per 3.3 square meters, which is equivalent to 1 "pyeong," at the end of 2021.
This indicates that the average price for an 84-square-meter unit in the capital, which is a popular size in Korea, has surpassed 1 billion won.
On December 31, the average price of 3.3 square meters in Gangnam-gu, the most expensive district in the capital, reached an all-time high of 70 million won, representing a 15.5 percent increase from the previous year's start date of January 1, 2021.
Following a record-breaking rise in housing prices in Seoul and other major cities under the Moon Jae-in administration since May 2017, the main question in the 2022 economy is whether the real estate market will stabilize this year. The next administration is scheduled to take office on May 10 of this year.
Following the results of a survey conducted by property information provider Zigbang on 1,236 users of its mobile application, 43 percent of respondents predicted that housing prices in their respective residential areas would decline this year. Approximately 38% predicted an increase in the number of people.
The price decline forecast for 2022 coincides with a slowdown in the growth of housing prices in some areas of Seoul in recent months. In fact, as a result of various government-led regulations, home prices in some less-expensive districts of the capital began to decline in December 2021, indicating that the housing bubble had been broken. These regulations included strict lending criteria for mortgages, as well as rate hikes orchestrated by the central bank.
Recently released reports from real estate-related research centers predicted that the year 2022 will be another year of price increases for homeowners.
The Construction Economy Research Institute of Korea and the Korea Housing Institute both predicted yearly increases of 2 and 2.5 percent for the entire country in their respective forecasts. In addition, the Korea Housing Institute predicted a 3 percent increase in Seoul and a 3.5 percent increase in the Gyeonggi Province-Incheon area in the next five years, respectively.
The Korea Research Institute for Construction Policy, on the other hand, predicted that apartment prices would rise by 5% this year.
The ruling party's presidential candidate, Lee Jae-myung, has revealed his position on increasing the comprehensive real estate tax in order to encourage the active sale of homes owned by multiple homeowners.
Yoon Suk-yeol, the presidential candidate of the main opposition party, on the other hand, has stated that he would implement a comprehensive tax relief program for homeowners.
