South Korean real estate shows divergent trends in sales and rentals

South Korea is experiencing significant divergence in its real estate market. In Seoul, apartment rental prices (jeonse) have surged, with average costs rising by approximately 82.68 million won over the last two years, reaching record highs. Monthly rents have also seen a sharp increase of over 24%. While rental burdens grow, the sales market in Seoul's affluent Gangnam districts is seeing a decline in prices due to increased tax burdens and loan regulations, leading some owners to sell at lower prices.

In contrast, Gwangju has seen a rebound in apartment sales prices, driven by expectations surrounding semiconductor plant establishments by companies like SK hynix and Samsung Electronics, as well as regional administrative integration. Meanwhile, Incheon's market shows a split, with sales prices turning downward in some areas while rental prices continue to rise.

On a broader scale, commercial real estate is struggling, with national vacancy rates for general stores hitting their highest levels since 2021. In Sejong and Daegu, vacancy rates remain particularly high. The economic pressure is further reflected in the high closure rate of small businesses, with over 970,000 businesses closing last year, primarily due to poor business performance.