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 split between Seoul's continued growth and declining prices in regional cities.
As of September 2025, average housing prices nationwide have increased only 0.31% year-over-year, which represents a 1.67% real decline when adjusted for inflation. Seoul continues to drive market growth with a 3.63% price increase, while major cities like Busan and Daegu face significant declines of 1.94% and 3.87% respectively.
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.
South Korea's housing market in 2025 is characterized by regional polarization, with Seoul experiencing growth while most other major cities see price declines.
Apartments continue to outperform other property types, and government policies remain supportive of buyers, though high interest rates constrain affordability outside the capital.
| Market Indicator | National Average | Seoul Performance | Regional Cities |
|---|---|---|---|
| Price Change (YoY) | +0.31% | +3.63% | -1.94% to -3.87% |
| Real Price Change | -1.67% | +2.0% (estimated) | -3.5% to -5.5% |
| Best Property Type | Apartments | Apartments | Limited growth |
| Transaction Volume | Lower than 2020 | +45% (2024) | Cooled significantly |
| Average Jeonse | KRW 232 million | KRW 444 million | Regional variations |
| Monthly Rent | KRW 778,000 | Higher than average | Below national average |
| 2025 Forecast | -0.5% decline | +2-3% growth | Continued stagnation |
How much have average housing prices in South Korea changed month by month this year compared to last year?
South Korea's monthly housing price changes in 2025 show minimal nationwide variation, with prices dropping approximately 0.2% year-over-year during the first months of 2025.
The Seoul metropolitan area is the primary driver of any positive monthly price movement, experiencing sustained monthly increases throughout 2025. This regional concentration means that national averages mask significant local variations in price performance.
Government housing price indices indicate that the monthly fluctuations remain within a narrow band, reflecting the overall market stagnation outside the capital region. The lack of significant monthly momentum suggests that the market has entered a period of consolidation after previous years of volatility.
It's something we develop in our South Korea property pack.
Which major cities like Seoul, Busan, and Daegu are seeing the biggest price drops or increases?
| City | Year-over-Year Change | Average Price Per sq m | Market Trend |
|---|---|---|---|
| Seoul | +3.63% | KRW 13.4 million | Strong growth |
| Busan | -1.94% | 5% decline in 2025 | Declining |
| Daegu | -3.87% | Third consecutive decline | Steep decline |
| Gwangju | -1% to -5% | Regional pricing | Continued decline |
| Daejeon | -1% to -5% | Regional pricing | Continued decline |
| Sejong | -1% to -5% | Regional pricing | Continued decline |
What's the difference in price trends between apartments, single-family homes, and new construction this year?
Apartments remain the clear winner in South Korea's property market, showing the strongest price gains with 1.65% rental growth and leading purchase price performance, especially in Seoul.
Row houses demonstrate modest growth of 0.5%, positioning them as a middle-ground option between high-performing apartments and struggling single-family homes. This property type offers some stability without the premium pricing associated with apartment complexes.
Detached single-family homes show minimal to negative growth at just 0.23%, reflecting weaker demand for this property type in the current market environment. The preference for urban living and apartment amenities continues to drive buyers away from traditional detached housing.
New construction projects maintain high demand in Seoul's urban centers, with over 236,000 new units planned through 2029. These developments focus primarily on apartment-style living, reinforcing the market preference for this property type.
How are transaction volumes changing compared to previous years, and are fewer people buying homes?
Seoul's transaction volumes surged 45% in 2024 compared to the previous year, demonstrating strong buyer activity in the capital region despite overall market challenges.
Nationwide sales remain below the 2020 peak levels, indicating that the broader market has not fully recovered to pre-pandemic transaction volumes. This suggests that buyer enthusiasm is concentrated in specific geographic areas rather than being widespread.
Regions outside Seoul have experienced a significant cooling in demand and transaction volumes, with fewer purchases and rising vacancy rates particularly affecting new developments. This regional disparity highlights the growing concentration of real estate activity in major urban centers.
The contrast between Seoul's robust transaction activity and regional market weakness reflects the ongoing urbanization trend and economic concentration in the capital area.
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 do government housing price indexes say about the national trend in 2025 so far?
The national housing price index shows a modest 0.31% year-over-year increase as of February 2025, which translates to a 1.67% real decline when adjusted for inflation.
Government forecasts predict a slight annual decline of 0.5% for the full year 2025, indicating continued market softness at the national level. This projection reflects the ongoing challenges facing regional markets outside the capital area.
Official outlook emphasizes continued regional polarization, with the capital region expected to outperform while the rest of the country faces stagnation or continued decline. This divergence has become a defining characteristic of South Korea's housing market.
The government's housing price tracking reveals that national averages mask significant regional variations, making location-specific analysis crucial for investment decisions.
Are rental prices, like jeonse and monthly rents, moving in the same direction as purchase prices?
Jeonse deposit system shows a national average of KRW 232 million, with Seoul commanding significantly higher deposits at KRW 444 million as of January 2025.
Monthly rental rates average KRW 778,000 nationwide, with Seoul properties commanding premium rents well above the national average. These rental rates remain relatively stable and are not moving in direct correlation with purchase price fluctuations.
Rental markets in Seoul maintain firm pricing or show moderate increases, even as some purchase prices face pressure. This disconnect suggests that rental demand remains robust in urban areas regardless of ownership market conditions.
The stability in rental pricing provides some insulation for property investors, as rental income streams remain more predictable than capital appreciation in the current market environment.
It's something we develop in our South Korea property pack.
How are interest rate changes from the Bank of Korea affecting housing demand and affordability?
Mortgage rates remain elevated at 4.2–4.8% in 2025, though slightly down from peak levels, creating affordability constraints for many potential buyers outside Seoul.
High borrowing costs have particularly impacted regional markets, where income levels cannot support the combination of property prices and elevated financing costs. This has contributed to the cooling of demand in cities like Busan and Daegu.
Seoul's apartment market demonstrates resilience despite high interest rates, with demand remaining strong due to the area's economic fundamentals and limited supply. The premium location factor appears to outweigh financing cost concerns for many buyers.
The elevated rate environment has effectively segmented the market, creating a divide between buyers who can afford higher financing costs in prime locations and those priced out of homeownership entirely.
What's happening with mortgage approval rates and average loan sizes compared to last year?
Banks maintain cautious lending standards in 2025, with overall approval rates remaining lower than pre-2023 levels, reflecting tighter credit conditions across the financial sector.
Average loan sizes for home purchases remain high, particularly for Seoul properties where purchase prices require substantial financing. However, banks are more selective about borrower qualifications and property valuations.
The tighter credit environment has contributed to reduced transaction volumes outside major urban centers, as potential buyers face both higher interest rates and stricter approval criteria.
Lenders are particularly cautious about properties in regional markets where price declines pose greater risks to loan security, further constraining market activity in these areas.
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.
Have there been any new housing policies, tax incentives, or restrictions introduced this year that impact demand?
Temporary transfer tax suspensions favoring buyers have been extended through mid-2026, providing continued incentives for property transactions and reducing the cost of ownership transfers.
The government has announced ambitious supply policies targeting 236,000 new housing units in Seoul by 2029, representing a significant increase in planned housing construction to address supply constraints.
Broadened eligibility for government mortgage guarantees for first-time buyers has been implemented, making homeownership more accessible for qualified purchasers entering the market.
No major new tax restrictions were announced in 2025, maintaining the current regulatory framework that has supported buyer activity in Seoul while regional markets continue to struggle.
What are analysts and real estate agencies forecasting for the rest of the year in terms of prices?
Analysts predict continued regional polarization for the remainder of 2025, with Seoul and immediate suburbs expected to post +2–3% price growth for the full year.
Regional cities face forecasts of further stagnation or gentle declines, with some markets potentially experiencing continued price pressure through the end of 2025.
Buyer sentiment in Seoul remains moderately optimistic, supported by strong economic fundamentals and employment growth in the capital region.
Outside capital areas, market sentiment remains subdued due to stagnant or falling property values, with many potential buyers adopting a wait-and-see approach.
It's something we develop in our South Korea property pack.
How are international factors like foreign investment or economic slowdown in China influencing housing demand in South Korea?
Foreign investment levels remain stable but are not significantly affecting 2025 housing market trends, with domestic factors playing a much larger role in price determination.
The economic slowdown in China has limited direct impact on South Korea's residential property market, as domestic job growth and urbanization patterns are more decisive for housing demand.
Analysts do not view global economic factors as major swing variables for the short-term Korean housing outlook, emphasizing the importance of local market dynamics over international influences.
The focus remains on domestic policy measures and regional economic performance rather than external investment flows or neighboring country economic conditions.
What's the sentiment among South Korean households—are more people expecting housing prices to keep falling or to stabilize?
Households in Seoul largely expect further modest price gains, with urban demand remaining robust due to strong local economic conditions and limited housing supply.
Outside the capital region, more South Koreans anticipate flat or falling prices, with pessimism particularly pronounced in weaker regional cities experiencing ongoing population outflows.
The sentiment divide reflects the underlying market fundamentals, with Seoul residents benefiting from job growth and urbanization trends while regional areas face demographic and economic challenges.
This divergent sentiment reinforces the market polarization, as confident Seoul buyers continue to support demand while regional buyers remain hesitant to enter the market.
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 in 2025 presents a tale of two markets: Seoul's continued growth versus regional decline.
For potential buyers, the key decision factor is location, as apartments in Seoul offer the best prospects while regional properties face continued headwinds.
Sources
- Global Property Guide - South Korea Price History
- BambooRoutes - South Korea Housing Market Outlook
- BambooRoutes - South Korea Price Forecasts
- BambooRoutes - South Korea Housing Market Forecast
- CEIC Data - Korea House Prices Growth
- Statista - South Korea Jeonse Prices by Province
- Trading Economics - South Korea Housing Index
- Statista - South Korea Housing Purchase Price Index