South Korea Luxury Residential Real Estate Market Size

South Korea Luxury Residential Real Estate Market Analysis

The South Korea Luxury Residential Real Estate Market size is estimated at USD 43.56 billion in 2024, and is expected to reach USD 70.18 billion by 2029, growing at a CAGR of 10% during the forecast period (2024-2029).

• The South Korean luxury residential real estate market is currently pegged at a market value of USD 39.6 billion and USD 63.80 billion in 2028. It is anticipated to register a CAGR of more than 10% over the forecast period.
• The market is driven by luxury real estate development in key cities. Furthermore, demand for apartments is driving the market.
• Property in Gangnam, a trio of upscale neighborhoods in Seoul, South Korea's capital, is starting to sag as the year-long tightening cycle of the central bank pounds on the upscale real estate market. According to Korea Real Estate Board data, apartment prices dropped in all Gangnam districts for four weeks. It portends the first monthly drop since the Bank of Korea started hiking its key rate in August 2022. The attack on Gangnam indicates that the 51 million Koreans living in the upper strata are now feeling the effects of tighter policy. The vast majority of Seoul residences included in the Knight Frank Prime Global Cities Index are Gangnam apartments, which slowed down after increasing quickly since 2008.
• Data from the Korea Real Estate Board showed that house prices in South Korea decreased by 1.98% in December 2022 compared to the previous month. It indicated the steepest loss since data release started in late 2003 and the seventh consecutive month of decline. According to a statement from the board, this represented a 4.68% fall for 2022 after a gain of 9.93% in 2021 and a loss of 1.37% in November. Globally, home values were falling precipitously due to central banks' rapid increases in interest rates to combat inflation. It cooled the economy and increased mortgage rates. According to the data, property prices nationwide fell by 4.89% during the past seven consecutive months, the largest decline for any seven months ever.
• According to statistics released on Monday, the housing market in Seoul entered a phase of stasis as apartment prices, which make up the majority of residential units in the city, are falling. Also, fewer transactions are occurring due to rising loan interest rates. In Seoul, the number of apartment units traded at lower prices than before surpassed the number of flats traded at greater prices, said Zigbang, a local property technology company. According to separate statistics from the Korea Real Estate Board, apartment prices in Seoul decreased by 0.09% last week, the 12th consecutive week of declines. Even Seocho-gu, a highly sought-after residential neighborhood in southern Seoul, defied price drops since the third week of February 2022 and saw trading prices finally fall.
• External factors like rising inflation and increased borrowing costs will keep the housing market and property prices down. However, this is unlikely to cause panic sales by homeowners or a harsh landing for the apartment market. According to analysts, the rising interest rate, which further slows demand for property purchases in Seoul, is one of the main factors holding down apartment prices. Due to the contraction in buying sentiment as the burden of interest rises, the transaction downturn in the apartment market is anticipated to last until the end of this year. Despite the units being offered for less, no housing transactions are happening. That is the amount that Seoul's apartment market shrunk.