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
South Korea's housing market in 2025 shows a clear two-speed recovery with Seoul leading the charge while regional cities struggle with oversupply.
As we reach mid-2025, Seoul apartment prices continue their upward trajectory with 3.6% year-on-year growth, while Busan and Daegu face declining values due to high inventory levels. The market is increasingly polarized between premium Seoul districts commanding up to 25 million KRW per square meter and regional areas where prices remain under pressure from demographic headwinds and excess supply.
If you want to go deeper, you can check our pack of documents related to the real estate market in South Korea, based on reliable facts and data, not opinions or rumors.
Seoul apartment prices average 13.4 million KRW per square meter while Busan and Daegu trade at roughly half those levels, with Seoul showing continued growth momentum.
Regional markets face oversupply challenges while Seoul benefits from tight inventory and strong demand for smaller units from single-person households.
| Key Metric | Seoul | Busan | Daegu |
|---|---|---|---|
| Average Price per sqm (KRW) | 13,400,000 | 6,690,000 | 6,713,000 |
| 1-Year Price Change | +3.6% | -1.9% | -3.9% |
| 5-Year Price Change | +27% | -5% (since 2022 peak) | +46% (but declining since 2023) |
| Rental Yield | 4.3% | 3-5% | 3-4% |
| Market Outlook | Continued growth | Flat to declining | Correction continuing |
| Supply Situation | Tight in prime areas | Oversupply | High inventory |
| Best Investment Strategy | Premium/emerging districts | Waterfront/luxury only | Wait for further correction |
What's the current average price per square meter for apartments, houses, and villas in major South Korean cities?
Seoul dominates South Korea's residential market with apartment prices averaging 13.4 million KRW per square meter as of June 2025.
Busan apartments trade at 6.69 million KRW per square meter, representing roughly half of Seoul's pricing levels. Daegu shows similar pricing at 6.71 million KRW per square meter, though this market faces more volatility due to oversupply conditions.
Houses and villas typically trade at discounts to apartment prices across all three cities. In Seoul, houses average around 11.4 million KRW per square meter while villas command approximately 12 million KRW per square meter. Busan houses average 5.9 million KRW per square meter with villas at 6 million KRW per square meter.
Premium Seoul districts including Gangnam, Seocho, Songpa, and Yongsan command significantly higher prices, with luxury properties reaching 18-25 million KRW per square meter for new developments.
It's something we develop in our South Korea property pack.
How have property prices changed over the last 6 months, 1 year, and 5 years?
Seoul's residential market has shown remarkable resilience with modest but consistent growth across all timeframes.
Over the past six months, Seoul apartment prices have increased 0.4-1.5%, demonstrating continued momentum despite economic uncertainties. Busan and Daegu have remained relatively flat or slightly declined during this period due to persistent oversupply issues.
The one-year picture shows Seoul's strength more clearly, with apartment prices up 3.6% year-on-year. In contrast, Busan has declined 1.9% while Daegu has fallen 3.9%, reflecting regional market challenges and demographic pressures.
The five-year trajectory reveals the most dramatic story. Seoul has experienced over 27% appreciation from 2019-2024, including a significant boom during 2020-2021, a brief correction, and renewed growth since late 2023. Busan peaked in 2022 but has since declined approximately 5%, while Daegu saw a remarkable 46% rise over five years before entering correction mode in 2023.
What are the current supply and demand trends for residential real estate by region and property type?
Seoul faces a supply-demand imbalance that strongly favors sellers, particularly in prime districts and for smaller unit types.
Demand remains exceptionally strong for small apartments and officetels due to South Korea's rising single-person household trend and continued urban migration to the capital. Young professionals and students drive significant rental demand in central Seoul neighborhoods.
Supply constraints in established Seoul districts like Gangnam, Songpa, and Yongsan continue supporting price growth. New construction faces lengthy approval processes and high land costs, limiting inventory expansion in desirable areas.
Regional markets tell a different story entirely. Busan and Daegu struggle with high inventory levels and weak demand outside luxury waterfront or premium segments. Aging populations and outmigration to Seoul compound these challenges.
Nationwide demographic trends favor smaller, accessible homes in urban centers while suburban and regional properties face declining interest from younger buyers.
What's the rental yield in key areas popular with investors and expats?
Seoul's overall rental market delivers approximately 4.3% gross rental yield, with significant variation by property size and location.
| Property Type/Location | Gross Rental Yield | Key Characteristics |
|---|---|---|
| Seoul 1-Bedroom | 6.6% | Highest yields due to strong demand |
| Seoul 2-Bedroom | 3.9% | Popular with young professionals |
| Seoul 3-Bedroom | 4.2% | Family market, steady demand |
| Gangnam/Songpa Premium | 2-4% | Lower yields, high capital appreciation |
| Busan Average | 3-5% | Higher for short-term/Airbnb |
| Officetels/Co-living | 3-6% | Growing segment, higher management |
| Expat-Focused Areas | 4-6% | Itaewon, Hongdae, International districts |
How are government policies, interest rates, and housing regulations currently influencing the market?
The Bank of Korea has implemented accommodative monetary policy, cutting rates from 3% to 2.25% since late 2024 to stimulate economic activity and housing demand.
However, rate cuts come with caution as policymakers worry about reigniting property speculation, particularly in Seoul's already expensive markets. This creates a delicate balancing act between supporting economic growth and preventing asset bubbles.
Regulatory measures have tightened significantly in premium Seoul districts. Gangnam, Seocho, Songpa, and Yongsan now require special permits for property sales, face stricter lending criteria, and impose higher acquisition taxes on multiple-home owners.
The government has fast-tracked affordable housing initiatives, targeting 400,000 new homes with 210,000 planned for the Seoul metropolitan region. These supply measures aim to improve affordability for first-time buyers while moderating price growth in overheated areas.
Foreign investment regulations have also evolved, raising minimum investment thresholds and adding compliance requirements, making the market more selective for international buyers.
Don't lose money on your property in South Korea
100% of people who have lost money there have spent less than 1 hour researching the market. We have reviewed everything there is to know. Grab our guide now.
What are the price projections for the next 6-12 months and 5-10 years?
Seoul's residential market is expected to continue its moderate growth trajectory over the next 6-12 months, with price increases likely in the 2-4% range.
This growth will be driven by continued tight supply in desirable districts, strong demand from urban migration, and supportive monetary policy. Premium areas may see higher appreciation as international buyers return to the market.
Regional cities including Busan and Daegu are projected to remain flat or experience slight declines over the next year due to persistent oversupply and demographic challenges. Only select premium or waterfront areas may show resilience.
The 5-10 year outlook reveals a more pronounced divergence between Seoul and regional markets. Seoul and other tech-driven urban centers are positioned for continued outperformance, supported by job creation, infrastructure investment, and lifestyle preferences of younger generations.
Regional and suburban areas face significant headwinds from aging populations, declining birth rates, and continued migration to major cities. These areas may experience stagnation or decline unless supported by major infrastructure projects or economic development initiatives.
Which areas are currently considered undervalued or poised for growth?
Emerging Seoul districts offer the most compelling growth opportunities, combining relative affordability with strong development momentum.
Mapo, Yongsan, Seongsu-dong, and Hongdae areas are experiencing rising demand and infrastructure investment, with price growth often outpacing traditional premium districts like Gangnam. These neighborhoods benefit from their appeal to younger demographics and proximity to tech companies.
Affordable Seoul outskirts including Guro-gu, Nowon-gu, and Gangdong-gu present value opportunities with potential for catch-up growth as infrastructure improves and urban development expands outward.
In Busan, select districts like Geumjeong-gu and Sasang-gu offer lower entry prices and may benefit from the city's efforts to reinvent itself as a tech and logistics hub. However, these areas require careful evaluation of local demand dynamics.
Districts benefiting from new subway lines, urban renewal projects, or proximity to expanding tech hubs are positioned for above-average appreciation as South Korea continues its digital transformation.
What's the current market sentiment among local and foreign buyers?
Local buyers display cautious optimism in Seoul while maintaining subdued expectations for regional markets.
Seoul buyers generally expect continued price increases in prime areas but express concerns about high debt levels and potential regulatory changes. Many are accelerating purchases to avoid being priced out of their preferred neighborhoods.
Regional city sentiment remains weak, with many potential buyers adopting a wait-and-see approach, hoping for further price corrections before entering the market. This creates a self-reinforcing cycle of weak demand and declining prices.
Foreign investors focus primarily on prime Seoul districts and select Busan locations, emphasizing rental yield and long-term capital appreciation potential. Recent policy changes have made the market more selective, with investors requiring higher return thresholds to justify entry.
Institutional buyers and foreign funds are increasingly active in the rental property sector, seeking stable cash flow investments in Seoul's tight rental market. Individual investors remain split between immediate purchasing in Seoul versus waiting for regional corrections.
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.
Where can I find decent value under $500K to live in Seoul?
Several Seoul districts offer viable options under $500K, particularly for buyers willing to consider smaller units or emerging neighborhoods.
Guro-gu, Nowon-gu, and Gangdong-gu represent the best value propositions, offering apartments under $500K especially in older buildings or compact layouts. These areas provide good access to Seoul's transport network while maintaining affordability.
Mapo-gu and Seodaemun-gu also offer opportunities, particularly in transitional neighborhoods experiencing gentrification and infrastructure improvements. These areas may provide better long-term appreciation potential.
Consider smaller apartments, officetels, or units in new affordable housing projects as viable options. These property types often provide better value per square meter and easier access to urban amenities compared to larger traditional apartments.
Focus on areas with improving infrastructure, planned redevelopment, or proximity to universities and business districts for the best combination of livability and long-term value growth potential.
Which neighborhoods offer the highest occupancy rates for rental properties?
Hongdae in Mapo-gu leads rental demand with occupancy rates reaching 81% for well-positioned properties, driven by its vibrant nightlife and proximity to universities.
Itaewon in Yongsan-gu maintains exceptionally strong rental demand from expats and international residents, providing consistent occupancy and premium rental rates. The area's international character and diplomatic presence ensure steady tenant flow.
Seongsu-dong has emerged as a hotspot for young professionals and creatives, offering high occupancy rates and growing rental premiums as the area gentrifies and attracts tech companies.
Co-living properties and officetels in central Seoul neighborhoods consistently achieve high occupancy rates, particularly those targeting single-person households and young professionals. These properties benefit from South Korea's demographic shift toward smaller household sizes.
University districts including areas near Hongik, Yonsei, and other major institutions provide stable rental demand from students and faculty, though seasonal variations may affect occupancy patterns.
It's something we develop in our South Korea property pack.
Which micro-markets show the best resale performance for 3-5 year holds?
Mapo, Yongsan, and Seongsu-dong have demonstrated the strongest resale performance, often surpassing previous peaks from the 2020-2021 property boom.
These areas benefit from active redevelopment projects, new transport links, and rising appeal among younger professionals working in tech and creative industries. Properties in these districts have shown consistent appreciation and quick resale times.
Select Gangnam sub-districts continue showing strong resale performance, particularly properties near new infrastructure or commercial developments. However, entry prices are significantly higher, requiring larger initial investments.
Emerging neighborhoods with confirmed infrastructure projects, such as new subway lines or urban renewal initiatives, offer compelling resale prospects for patient investors willing to hold through development cycles.
Focus on districts attracting younger populations, receiving government investment, or benefiting from corporate relocations for optimal 3-5 year resale performance in Seoul's evolving urban landscape.
What are the main risks for buyers in the current market?
Price bubble concerns top the risk list, particularly in Seoul where affordability metrics have reached record highs and monthly payments consume large portions of median incomes.
1. **Oversupply risks in regional markets** - Busan, Daegu, and suburban areas face high unsold inventory and weak demand, creating potential for further price declines2. **Demographic headwinds** - Aging population and declining birth rates threaten long-term demand outside major urban centers3. **Policy uncertainty** - Rapid regulatory changes including loan restrictions, acquisition taxes, and foreign investment rules can significantly impact market access4. **Jeonse system instability** - Traditional deposit-based rental arrangements face declining trust due to fraud cases and liquidity issues5. **Interest rate risk** - Potential future rate increases could reduce affordability and cool demand, particularly for leveraged buyersRegional buyers face the additional risk of continued outmigration to Seoul, which could permanently depress demand and values in smaller cities and rural areas.
Foreign buyers must navigate complex regulatory requirements and potential policy changes that could affect investment returns or exit strategies.
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.
South Korea's housing market as of June 2025 presents a tale of two distinct markets.
Seoul continues its growth trajectory with tight supply and strong demand, while regional cities struggle with oversupply and demographic challenges, creating clear opportunities for informed investors who understand the diverging market dynamics.
Sources
- Global Property Guide - South Korea Price History
- BambooRoutes - Seoul Average Apartment Prices
- BambooRoutes - Daegu Real Estate Market
- BambooRoutes - South Korea Price Forecasts
- Asia On The Way - Best Seoul Neighborhoods 2025
- BambooRoutes - Busan Property Market
- BambooRoutes - South Korea Real Estate Trends
- BambooRoutes - South Korea Housing Market Forecast
- AI Invest - South Korea Housing Market BOK Dilemma
- Savills - South Korea Market Research