What is the real estate market forecast in South Korea?

Authored by the expert who managed and guided the team behind the South Korea Property Pack

Everything you need to know before buying real estate is included in our South Korea Property Pack

How this content was created 🔎📝

At BambooRoutes, we explore the South Korean real estate market every day. Our team doesn't just analyze data from a distance—we're actively engaging with local realtors, investors, and property managers in cities like Seoul, Busan, and Daegu. This hands-on approach allows us to gain a deep understanding of the market from the inside out.

These observations are originally based on what we've learned through these conversations and our observations. But it was not enough. To back them up, we also needed to rely on trusted resources

We prioritize accuracy and authority. Trends lacking solid data or expert validation were excluded.

Trustworthiness is central to our work. Every source and citation is clearly listed, ensuring transparency. A writing AI-powered tool was used solely to refine readability and engagement.

To make the information accessible, our team designed custom infographics that clarify key points. We hope you will like them! All illustrations and media were created in-house and added manually.

What are current property prices in Seoul, Busan, and Daegu?

Seoul property prices average KRW 13.4 million per square meter as of June 2025, more than double the national average.

Premium districts like Gangnam command up to KRW 2.38 billion for standard apartments, while emerging neighborhoods start around KRW 8-10 million per square meter.

Busan averages KRW 6.69 million per square meter with typical apartments costing around KRW 422 million, significantly lower than Seoul but still reflecting the city's coastal premium.

Daegu shows similar pricing at KRW 6.71 million per square meter, with average apartments around KRW 400 million, though the market faces declining trends.

These price gaps reflect Seoul's severe housing shortage versus oversupply in regional markets.

How have prices changed recently and what's expected next year?

Seoul prices climbed 3.6% year-on-year, continuing moderate growth despite national market challenges.

Busan and Daegu experienced price declines of 1.9% and 3.9% respectively, reflecting oversupply and weaker local demand.

The national house price index rose just 0.3% year-on-year, but real prices fell when accounting for inflation.

For 2026, 36% of Koreans expect further price declines nationally, but Seoul will likely remain resilient due to ongoing supply constraints and major infrastructure projects.

Regional cities may continue experiencing stagnation or mild declines as population shifts toward the capital region accelerate.

What are the medium and long-term market forecasts?

Medium-term forecasts (2-5 years) strongly favor Seoul and the capital region, driven by infrastructure like GTX rail lines, urban renewal projects, and demographic shifts toward smaller households.

Timeframe	Seoul/Capital Region	Regional Cities
2-3 Years	Continued growth, infrastructure-driven	Oversupply risks, population decline
3-5 Years	Strong appreciation in emerging districts	Persistent price stagnation likely
5-7 Years	Tech sector growth supports demand	Demographic headwinds intensify
7-10 Years	Urbanization continues favoring capital	Structural oversupply challenges
Long-term Drivers	Job growth, infrastructure, lifestyle	Aging population, outmigration

Long-term trends (5-10 years) include persistent urbanization favoring Seoul, aging population increasing demand for smaller units, and policy-driven supply increases potentially moderating price growth.

Which property types show the most growth or decline?

Apartments continue dominating the market, especially in Seoul where premium units show the strongest price resilience and liquidity.

Officetels and studios deliver the highest rental yields, reaching up to 6.5% for one-bedroom units in Seoul, driven by young professional demand.

Villas and low-rise properties face challenges with lower liquidity and slower appreciation outside central Seoul.

Commercial units experienced significant valuation declines of 8-20% over three years, though prime logistics and data centers attract increasing investor interest.

Co-living spaces gain traction for higher yields but require active management expertise.

Are there regional differences in price trends and rental yields?

Seoul maintains the highest prices but lowest gross yields in premium districts at 2-4%, offset by superior liquidity and appreciation potential.

Region	Price Trend	Rental Yield
Seoul Premium (Gangnam)	Strong growth (+3.6% YoY)	2-4% gross yield
Seoul Emerging Districts	Rapid appreciation expected	4-6% gross yield
Busan	Declining (-1.9% YoY)	3-5% gross yield
Daegu	Declining (-3.9% YoY)	3-5% gross yield
Satellite Cities	Infrastructure-driven growth	3.5-5% gross yield

Busan, Daegu, and other regional cities offer lower prices and higher gross yields of 3-5%, but face weaker capital appreciation and slower resale processes.

Emerging suburbs like Dongtan and Gwanggyo New Town show rapid price growth due to infrastructure development and new residential projects.

What government policies and regulations are impacting the market?

The Bank of Korea cut interest rates to 3.0% to stimulate borrowing, with potential for further cuts depending on economic conditions.

Temporary suspension of heavy transfer taxes for multi-homeowners until May 2026 reduces transaction costs and boosts market liquidity in the short term.

Tightened controls on apartment sales in wealthy Seoul districts aim to cool speculation, while pending restrictions on foreign buyers may limit international investment.

Government supply policy pushes affordable housing and rental supply, especially in urban centers, potentially moderating long-term price growth.

It's something we develop in our South Korea property pack.

What are current rental yields by area and property type?

Seoul averages 4.3% gross rental yield, with significant variation by unit size and location.

One-bedroom units achieve the highest yields at 6.6%, while larger three-bedroom apartments yield around 4.2% in the capital.

Officetels consistently deliver 3-5% yields, with smaller units in urban centers performing best for buy-to-let investors.

Co-living spaces offer 4-6% yields but require higher management intensity and market expertise.

Net yields typically run 1.5-2% lower after accounting for management fees, taxes, and maintenance costs.

Which areas and property types will appreciate most in the short to medium term?

Seoul's emerging districts including Mapo, Yongsan, and Seongsu offer better value and higher rental yields than established Gangnam area.

1. **GTX Line Areas**: Properties along new express rail lines show exceptional appreciation potential2. **Dongtan New Town**: Strong demand from tech sector growth and infrastructure development3. **Pangyo District**: Continued expansion as Korea's Silicon Valley drives property values4. **Gwanggyo**: New city development attracts young professionals and families5. **Yongsan**: Urban regeneration projects and proximity to Seoul Station boost prospects

Prime commercial and logistics assets near Seoul attract institutional investors seeking stable returns in an uncertain market.

These locations benefit from infrastructure investment, job creation, and lifestyle improvements that drive both residential and commercial demand.

We did some research and made this infographic to help you quickly compare rental yields of the major cities in South Korea versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.

How liquid is the market for different property types and cities?

Seoul apartments maintain extremely high liquidity, especially in central and premium districts where transaction volumes surged 45% year-on-year in 2024.

Officetels and studios show good liquidity in urban centers but face challenges in suburban locations where demand remains limited.

Villas and low-rise properties suffer from poor liquidity, particularly outside Seoul where buyer pools shrink significantly.

Commercial units face liquidity challenges due to oversupply and tighter financing conditions, though prime assets still attract institutional buyers.

Transaction speed varies dramatically, with Seoul premium properties selling within weeks while regional properties may take months to find buyers.

What are the minimum and optimal budgets for high-potential zones?

Seoul entry-level apartments in emerging districts start at KRW 8-10 million per square meter, requiring total investments of KRW 600-800 million for small units.

Premium Seoul districts demand KRW 2-3 billion for standard apartments, limiting access to high-net-worth investors and institutional buyers.

Busan and Daegu offer entry points from KRW 400 million for standard apartments, with lower prices for smaller or older properties.

Optimal budget range of KRW 1-1.5 billion enables access to high-potential zones in Seoul and top-tier developments in satellite cities.

This budget level provides sufficient choice and negotiating power while accessing areas with strong infrastructure and appreciation potential.

What areas and property types offer the best value for owner-occupiers?

Seoul's emerging neighborhoods including Mapo, Yongsan, and Seongsu provide excellent balance of value, future appreciation, and lifestyle amenities.

New towns like Dongtan and Gwanggyo offer modern infrastructure, community amenities, and better value compared to established Seoul districts.

Modern apartments and mixed-use developments with strong transportation links provide the best long-term security for residents.

Properties near GTX stations will benefit from improved connectivity and reduced commute times to central Seoul.

It's something we develop in our South Korea property pack.

What are the best investment strategies for resale or rental income?

Buy-to-let investors should focus on small apartments, officetels, or co-living spaces in urban centers for higher yields and superior liquidity.

1. **Property Flipping Strategy**: Target up-and-coming districts with infrastructure projects like GTX lines, Dongtan, and Seongsu2. **Rental Income Focus**: Invest in one-bedroom units and officetels near universities and business districts3. **Long-term Appreciation**: Buy in emerging Seoul districts before major infrastructure completion4. **Diversification Approach**: Mix residential and select commercial assets like logistics and data centers5. **Timing Strategy**: Enter during policy-driven tax relief periods and low interest rates

Optimal timing involves entering during periods of policy-driven tax relief and low interest rates, while planning exits before policy reversals or supply surges.

Diversification across residential and select commercial assets like logistics and data centers provides risk management in volatile markets.

It's something we develop in our South Korea property pack.

Conclusion

This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.

Sources

1. Global Property Guide - South Korea Price History
2. BambooRoutes - South Korea Buy Property
3. BambooRoutes - South Korea Price Forecasts
4. Maeil Business Newspaper - Real Estate
5. Statista - South Korea House Price Opinions
6. BambooRoutes - South Korea Housing Market Forecast
7. Asia On The Way - Best Seoul Neighborhoods 2025
8. Statista - South Korea Residential Real Estate Outlook