Housing Price Growth in Seoul Slows
Economists Link Slower Pace to the Lunar New Year
Apartment prices in Seoul have risen for 55 consecutive weeks, although the pace of growth has slowed to a five-month low ahead of the Bank of Korea’s policy rate decision. The meeting is scheduled for February 26, Bloomberg reports. A week earlier, prices had increased by 0.22%, but by February 16 the gain had eased to 0.15%, the weakest result since September 2025. Nationwide, prices rose by 0.06%.
The Korea Real Estate Board attributes the softer momentum not to expectations surrounding the rate decision, but to the Lunar New Year holidays. During that period, transaction volumes and purchase inquiries declined. Demand remains concentrated in large apartment complexes, properties near subway stations, reputable school districts, and redevelopment projects. These segments continue to underpin overall price growth in the capital.
Housing Market Dynamics in South Korea’s Capital
In 2025, apartment prices in Seoul increased by nearly 9%, compared with roughly 1% nationwide. The gap highlights the concentration of demand in the capital, where jobs, education, and business activity are clustered, sustaining persistent pressure on the property market.
Units that cost around 400 million won in the mid-2010s are now trading at roughly three times that level. For many young professionals, homeownership is becoming increasingly out of reach. Bohyun Lee, a 33-year-old financial sector employee, has moved seven times after two-year lease contracts expired and says the opportunity to buy a home is gradually slipping away.
Mortgage Restrictions in South Korea
Authorities have tightened mortgage rules in an effort to cool the property market. In all regulated districts across Seoul, the maximum loan-to-value ratio has been reduced to 40%. The size of the loan depends on the property’s price: the higher the price, the lower the permitted loan limit. Additional restrictions apply to borrowers’ debt-servicing ratios, along with quotas on banks’ mortgage lending growth.
Bloomberg economist Hyosung Kwon argues that with supply constraints still in place, financial restrictions alone are insufficient to change expectations of further price increases. Household debt, more than 60% of which consists of mortgage loans, is approaching 90% of GDP, raising concerns about financial stability.
Criticism from the President
President Lee Jae Myung has sharply criticized the market situation in recent weeks. In social media posts, he stated that rising prices reflect distorted incentives rather than genuine housing demand.
In early February, he urged owners of multiple properties to sell more actively and pledged to use all available tools to curb prices. He also warned against extending tax benefits on property sales.
The current trend resembles the previous record rally, when apartment prices in Seoul rose for 85 consecutive weeks between June 2020 and January 2022. The renewed prolonged upswing once again forces policymakers to balance economic support with the need to contain financial risks.
Rate Outlook and Political Factor
Economists expect the Bank of Korea to keep its benchmark rate unchanged on February 26. The situation is complicated by the fact that housing prices have become one of the most sensitive domestic political issues. Prolonged price increases are already affecting public sentiment and support for President Lee ahead of upcoming local elections.
Analysts at International Investment note that the Bank of Korea’s rate decision is viewed as more than a routine monetary policy step. Any easing could be interpreted as a signal that might further fuel price growth in the capital. Keeping the rate unchanged, by contrast, would underscore the priority of containing financial risks. The upcoming meeting thus represents a test of the balance between central bank independence and political pressure stemming from a socially sensitive housing market.