Housing Market Polarization and Trends in Seoul

The shocking disparity in Seoul's housing market highlights a stark divide between high-end and low-end apartments.

### Polarization in Gangnam's Housing Market
The housing price increase in Gangnam's three districts is significantly higher than in Jungnang and Gangbuk, with the **gap between high-end and low-end apartments widening**. As of 2024, the bottom 20% of apartments have **dropped in price**, while the top 20% have seen a **substantial increase**, creating a **5.2 times difference**. In July, Seoul was the only area to see an **increase in housing transaction volume**, contrasting with a decline in all other regions, and the **non-apartment transaction market has collapsed**.

### The Polarization of Seoul's Housing Market
The Seoul housing market is showing a significant polarization, with areas like Gangnam, Songpa, and Seocho experiencing a **sharp increase in housing prices**, while districts like Bupyeong, Jungnang, and Gangbuk lag behind. The disparity between high-end and low-end apartments has widened, with the top 20% now averaging **2.5 billion won**, compared to **480 million won** for the bottom 20%. Despite a slight decrease in unsold properties, the provincial market remains sluggish, indicating that the **recovery is not yet complete**.

### Shifts in Home Buying Trends in Korea
The proportion of home purchases by those in their 20s has **significantly decreased**, while it has **increased for those in their 30s**. The decline in home buying among the younger age group is linked to the **cryptocurrency boom and subsequent market crashes**. Popular areas for home purchases in 2023 and 2024 include districts with **lower housing prices**, attracting both 20-somethings and 30-somethings.

### Housing Transactions and Government Budget Impact
In areas with low housing prices, there are numerous transactions, but the **lack of investment demand** has kept price increases minimal. The Ministry of Land, Infrastructure and Transport has announced a **3% budget increase** for 2025, but the government is adopting an **austerity approach**. Underperforming national tax revenue is leading to a **significant deficit**, which is expected to **worsen in the future**.

### The Impact of Birth Rates on Korea's Exchange Rate
Korea's exchange rate is influenced by the country's **future tax revenue** and is under pressure to **weaken due to rising birth rates**. Short-term fluctuations are driven by **industrial factors and foreign currency values**, but long-term value is assessed based on **cash flow**. The current situation presents an opportunity to **exchange dollars at a lower rate**, and there's a promotional event on Naver Premium Content offering a **50% discount coupon for subscribers**.

### Housing Market Polarization in Seoul: A Decade of Disparity
* 🏢  The housing price increase rate in Gangnam's three districts shows a stark contrast to the surrounding areas like Jungnang and Gangbuk over the past ten years, highlighting **significant market polarization**.
* 📊  In 2021, during the asset market peak, the average price of the top 20% of apartments was **4.14 times** that of the bottom 20%, a gap that has now widened to **5.2 times** as of 2024, with the bottom 20% dropping from **540 million** to **488 million won** and the top 20% rising to between **2.2 billion and 2.5 billion won**.
* 📈  July's housing transaction statistics reveal that only Seoul experienced an increase in transaction volume, while other regions saw declines, with Seoul's cumulative apartment transactions **rising by 11.8% over the past five years**.
* 🏘️  The overall transaction volume for apartments and non-apartments is down **13%** and **44%**, respectively, indicating a **collapse in the non-apartment market**, while Seoul's apartment transactions exceeded **8,000** in July.
* 🗓️  Looking ahead, the transaction volume in Seoul is expected to **decrease to around 5,000 to 6,000 cases** by the end of the year, following a peak in August, reflecting historical trends.
* 💰  The demographic shift in homebuyers shows that those in their 20s are purchasing fewer homes, with their proportion **dropping to 5.3%**, while those in their 30s are increasingly entering the market, particularly in districts where prices **remain relatively low**.
* 🏦  The government's budget for the Ministry of Land, Infrastructure, and Transport for 2025 is set at **58 trillion won**, a **3% increase** from the previous year, but concerns about **national tax revenue underperformance** and potential **deficits loom large**.
* 💵  Amidst fluctuations in the exchange rate and economic conditions, there is an opportunity to consider currency exchange, particularly with the **current strength of the won against the dollar**, as well as ongoing promotional events in the real estate market.

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