Land minister says Gangnam, Yongsan home prices have turned negative
In short
Land, Infrastructure and Transport Minister Hong Ji-seon told a National Assembly audit on Oct 7 that home prices in Seoul's Gangnam three districts and Yongsan have turned negative, and said price growth should ease with the market stabilizing by year-end. She also described the decline of the jeonse rental system as a “megatrend” and said a decision on extending or widening land transaction permit zones depends on prices and subscription competition rates.
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Land, Infrastructure and Transport Minister Hong Ji-seon told the National Assembly's Land, Infrastructure and Transport Committee on Oct 7 that housing prices in Seoul's Gangnam, Seocho and Songpa districts and in Yongsan district have turned negative, and that price growth in other areas has slowed. She said that toward the end of the year the rate of increase should shrink and the housing market should stabilize. Several outlets carried the remark in their headlines. [ 2 , 3 , 4 , 5 , 6 ]
The minister was answering a question from People Power Party lawmaker Kim Jung-jae about the rise in Seoul apartment prices, which the question described as running for 86 consecutive weeks. Hong said Gangnam's three districts and Yongsan had already turned to negative territory and that other districts' gains were easing. [ 2 , 5 , 6 ]
Asked whether the jeonse rental system would disappear, Hong called it a “megatrend,” citing an increase in single-person households and concerns over jeonse fraud. She said the government is operating the Housing and Urban Guarantee Corporation's jeonse and monthly-rent safety trust scheme so that landlords can earn stable returns and tenants can place their deposits. [ 5 , 6 ]
On land transaction permit zones, currently in force across parts of Seoul and Gyeonggi, the minister did not commit to extending or widening them. She said the ministry does not make the decision on its own and that housing price growth rates and subscription competition rates must be judged together, adding that the market is being closely watched. She said her answer at the audit was not the place for a definitive decision. [ 5 , 6 ]
In her briefing to the committee before taking questions, Hong put priority on rapid housing supply. She said the government would build a shortest-time groundbreaking model for public housing sites, secure new sites to expand the volume of public-site construction, and actively remove factors slowing urban redevelopment and reconstruction projects. [ 5 ]
The documents record only her statements and the lawmaker's question. They do not provide price figures for the districts she named, nor data behind the year-end stabilization forecast, and no decision on the permit zones has been announced. [ 2 , 5 , 6 ]
Why it matters
The remarks are the government's public read on a housing market that has been rising for an extended period, and they come as officials weigh whether to extend or widen land transaction permit zones in Seoul and parts of Gyeonggi. Her description of jeonse's decline as a structural trend points to continued pressure on renters as leases shift to monthly rent, which she said the government is addressing through a guarantee corporation scheme.
Key facts
- Land, Infrastructure and Transport Minister Hong Ji-seon said at the Oct 7 parliamentary audit that home prices in Gangnam, Seocho and Songpa districts and in Yongsan district have turned negative. [ 2 , 5 , 6 ]
- She said price growth in other areas has slowed and that the rate of increase should decline and the market stabilize by year-end. [ 2 , 5 , 6 ]
- She was answering a question from People Power Party lawmaker Kim Jung-jae, who raised Seoul apartment prices rising for 86 consecutive weeks. [ 2 , 5 , 6 ]
- Asked whether the jeonse system would disappear, she called it a “megatrend,” citing growth in single-person households and concerns about jeonse fraud. [ 5 , 6 ]
- She said the government is running the Housing and Urban Guarantee Corporation's jeonse and monthly-rent safety trust scheme so landlords can earn stable returns and tenants can place deposits. [ 6 ]
- On extending or expanding land transaction permit zones, she said the ministry does not decide simply on its own and that price growth rates and subscription competition rates must be judged together, adding that the market is being closely watched. [ 5 , 6 ]
- In her briefing to the committee she put priority on rapid housing supply, including a shortest-time groundbreaking model for public housing sites, securing new sites and clearing obstacles to urban redevelopment and reconstruction. [ 5 ]
Confirmed by several sources
- Hong Ji-seon, the land, infrastructure and transport minister, appeared at the National Assembly's Land, Infrastructure and Transport Committee audit on Oct 7 and answered lawmakers' questions. [ 2 , 5 , 6 , 7 ]
- She said housing prices in Gangnam, Seocho and Songpa districts and Yongsan district have turned negative. [ 2 , 5 , 6 ]
- She forecast that the rate of housing price increases would shrink and the market would stabilize toward the end of the year. [ 2 , 3 , 4 , 5 , 6 ]
- She called the disappearance of the jeonse system a “megatrend,” citing more single-person households and jeonse fraud concerns. [ 5 , 6 ]
- She said extending or expanding land transaction permit zones is not something she could decide definitively at the audit and that the housing market is being closely observed. [ 5 , 6 ]
Still unclear
- Whether land transaction permit zones now in force in parts of Seoul and Gyeonggi will be extended or widened. The minister said the ministry does not decide this on its own and that price growth and subscription competition rates must be reviewed together, without giving a timeframe or criteria.
- The scale of the price declines she described in Gangnam and Yongsan, and the current level of Seoul apartment prices. The documents report her characterization of the trend and the 86-week rise raised by a lawmaker, but give no price figures or index levels.
- What supporting data the ministry used for the year-end stabilization forecast. No statistics, index releases or forecasts beyond the minister's own statement appear in the documents.
- Details of the jeonse and monthly-rent safety trust scheme beyond the minister's description of it. It is mentioned by only one outlet and only in the minister's words, with no figures on take-up, deposits or coverage.
What local media are saying
Timeline, local time
- Chosun Ilbo reports the minister's remarks at the National Assembly audit, including that Gangnam's three districts and Yongsan have turned negative and that the market should stabilize by year-end. [ 2 ]
- Newsis headlines her statement that the pace of Seoul home price increases will slow by year-end. [ 3 ]
- Korea Economic Daily headlines the remark, alongside its description of the run-up as the longest on record. [ 4 ]
- Kyunghyang Shinmun adds her description of jeonse's decline as a “megatrend,” her comments on land transaction permit zones and her emphasis on swift housing supply. [ 5 ]
- Asia Economy reports her reference to the Housing and Urban Guarantee Corporation's jeonse and monthly-rent safety trust scheme as a measure to ease tenants' burden. [ 6 ]
- Maeil Business carries a photo report of the minister answering questions at the audit. [ 7 ]