Skyrocketing apartment costs sweep Seoul, creating a housing crisis.
Apartments Across Seoul: Skyrocketing Prices, Shortages, and Emerging Trends
Hey there! Let's dive into the current Seoul apartment scene.
Price Disparity and Record Highs
Seoul's luxury districts boast soaring prices, with the average sale price for small apartments in Gangnam reaching an astounding KRW 2.38 billion in 2025 - smashing previous records from 2022. In comparison, northern regions still linger slightly below their 2021 peaks, with prices approximately 6% lower[1]. The overall average apartment prices in Seoul are nearing record levels, surpassing KRW 13.4 million per square meter in early 2025.
Rising Prices in the Face of Supply Shortages
Apartment sale prices have been steadily climbing, with 19 straight weeks of price increases reported in mid-2025. This escalation is primarily fueled by a scarcity of new apartments on the market. New apartment presales dropped a significant 28% year-over-year to reach a four-year low, due to limited new construction mainly from redevelopment or reconstruction projects[4]. As supply stays tight, increased investor interest propels prices higher[4][5].
Emergence of Co-Living Spaces
Co-living arrangements have become an increasingly popular residential trend in Seoul, especially among young professionals, students, and international residents. These units, usually under 40 square meters, offer private living spaces paired with shared amenities like gyms, coworking spaces, and kitchens. The typical monthly rent for co-living units amounts to about 1.13 million won, which is approximately 1.5 times higher than officetel rents, demonstrating strong demand and premium status for co-living properties[2].
Apartments Dominate Rental Growth
Apartmentscontinue to reign supreme in Seoul's residential market,showing the highest rental growth compared to alternate housing options. Apartment rentals recorded around 1.65% year-over-year growth, outpacing row houses and detached houses. The preference for apartmentsreflects the city's urbanization and modern lifestyles embracing amenity-rich living spaces[3]. Office-hotels, blending residential and office functions, are also gaining traction among single-person households.
Market Outlook and Investment Considerations
While premium districts like Gangnam pose formidableaffordability challenges, transaction volumes skyrocketed an impressive 45% year-over-year in 2024, indicating a robust market[5]. Emerging districts such as Mapo, Yongsan, and areas neighboring planned GTX rail lines loom as more affordable alternatives, priced 25-40% lower compared to premium areas, offering higher rental yields (3.5%-4%) - catching the eye of investors navigating supply constraints[5]. The luxury housing segment remains robust and poised for substantial growth through 2030[3].
- The government must address the supply shortage in Seoul's housing market to prevent apartment prices from further escalation, as new apartment presales have dropped significantly due to limited new construction.
- The impact of the rising housing prices in Seoul extends beyond luxury districts, as the overall average apartment prices are nearing record levels, making it challenging for average citizens to invest in real estate.
- Businesses in the real-estate industry are encouraged to explore market opportunities in emerging regions such as Mapo, Yongsan, and GTX rail line neighboring areas, as these areas offer more affordable alternatives with higher rental yields for investors.
- The finance industry should consider the potential growth of the co-living segment in Seoul's residential market, as these units have gained popularity among young professionals, students, and international residents, offering a premium status and strong demand for lending opportunities.
