[비즈한국] With house prices in Seoul rising significantly, it is time to change the criteria we use to view the capital area housing market. In the past, the choice between “Seoul or Gyeonggi” was a key standard, but moving forward, judgments must be based on living zones and the quality of demand rather than administrative districts.
Core residential areas in Seoul still possess the strongest demand in South Korea. The competitiveness of major areas such as Gangnam, Seocho, Songpa, Yongsan, Seongdong, and Mapo will not be easily eroded. The issue is price. Seoul apartments in prime locations have already reached levels that are difficult to access unless a household already possesses significant assets.
However, lowering your standards for location within Seoul just to fit a budget is not necessarily the right answer. Instead, it is now necessary to directly compare relatively lower-tier areas in Seoul with core regions of Gyeonggi Province.
There has long been a strong perception in the housing market that “it has to be Seoul.” However, the administrative district of Seoul itself does not guarantee the future value of a house. Even within Seoul, gaps are widening based on job accessibility, transportation, educational environments, and residential product quality.
Rather than buying aging apartments on the outskirts of Seoul at high prices in the hope of further price appreciation simply because they are in Seoul, it is increasingly becoming more rational to choose core Gyeonggi living zones with proven demand, such as Pangyo, Bundang, Suji, Gwanggyo, Yeongtong, Dongtan, and Gwangmyeong.
Therefore, we must now stop asking “Where in Seoul or Gyeonggi should I buy?” and start asking “Should I choose an average location in Seoul or an excellent location in Gyeonggi?”
This judgment will likely become even more important over the next three years. Looking at recent trends in the Gyeonggi housing market, not all areas are rising simultaneously. Demand is concentrating in specific regions equipped with jobs, transportation, education, and new housing environments. The strong price trends seen in Suwon’s Yeongtong, Yongin’s Suji, Dongtan, and Gwangmyeong illustrate this well.
This phenomenon means that Gyeonggi should not be viewed as a single market. The differences between regions in Gyeonggi are much greater than in Seoul. This is why the housing markets of Bundang and the outskirts of the capital region cannot be evaluated by the same standards.
The future capital area market is more likely to be a competition between “core living zones and non-core living zones” rather than a rivalry between Seoul and Gyeonggi.
The factors determining housing prices are also becoming clearer. What matters is how quickly one can reach major business districts like Gangnam or Pangyo, whether quality jobs exist nearby, whether the area is equipped with an excellent educational environment and living infrastructure, and whether there is potential for product improvement through new apartments or urban renewal projects.
Under these criteria, the boundaries of administrative districts carry less weight than in the past, as actual living zones have already formed across the borders of Seoul and Gyeonggi.
Perspectives on regulated areas also need to change. Generally, real estate investors believe that when a specific region is designated as a regulated area, its investment appeal drops significantly. Of course, because restrictions are placed on loans, taxes, and transaction conditions, the speed of transaction volume and price increases may slow down in the short term.
However, one should not evaluate a region’s competitiveness poorly simply because it has become a regulated area. Most regulations are introduced after price increases, increased trading, and demand concentration. In other words, ironically, a regulated area is highly likely to be a place where demand has already been proven.
What matters is not whether a region is regulated, but whether real demand is maintained even after regulations are imposed. If the intrinsic competitiveness of a region—such as transportation, jobs, and educational environments—is maintained, regulations are more likely to shift demand in the short term rather than eliminate it. If loan regulations are tightened or prices rise sharply in a specific area, demand shifts to adjacent living zones.
In this process, new opportunities also arise in non-regulated areas. However, one should not choose a non-regulated area simply because it is not under regulation. What is important is whether the area can absorb the demand shifting from stronger regions.
One of the recurring phenomena in the real estate market is the migration of demand. When prices in a core area rise sharply, demand shifts to adjacent areas, and when prices in those areas rise, it spreads to the next living zone.
Therefore, in non-regulated areas, rather than looking for a “cheap area,” you should look for a “region where demand from strong areas is highly likely to migrate next.” It is important to consider which area to choose when Pangyo becomes expensive, where demand will shift when the price burden of Bundang or Suji increases, and which living zone will serve as an alternative after price hikes in Yeongtong and Dongtan.
Another reason to be positive about the capital region housing market over the next three years is supply. The government is continuously announcing the expansion of housing supply in the capital area. It is a necessary policy in the long term. However, housing supply takes a considerable amount of time. It takes several years from securing land, permits, and compensation to construction and actual move-ins.
There is a significant time lag between the supply volumes announced by policy and the actual housing available in the market. In particular, the supply of apartments in preferred regions is even more limited. Even if the overall supply in the capital region is sufficient, if there is a shortage of supply in areas with excellent accessibility to Seoul or places where one can commute to major business hubs like Pangyo and Gangnam, the supply-demand problem in core areas will not be solved.
What is important in the real estate market is not just the total supply. You have to look at whether supply is reaching where demand exists. Providing housing needed in Seoul on the outskirts of the capital region does not mean that Seoul's residential demand will fully relocate. It is also difficult to replace Suwon's housing shortage with supply from other cities.
What people want is not simply a new apartment. They want a home where commuting to work is convenient, education for children is good, living infrastructure is in place, and a house that others will want to buy in the future. Therefore, for the future capital region market, the expression “shortage of quality housing in preferred areas” is more accurate than “housing supply shortage.”
In such a market, clear criteria are also needed when choosing Gyeonggi.
First is jobs. Areas connected to industries that generate high income, such as Pangyo, the Gangnam business district, and Samsung Electronics and semiconductor industrial complexes, form strong long-term housing demand.
Second is transportation. Rather than the name of the wide-area transportation network, including the GTX, what matters is how much actual commuting time is reduced.
Third is education and living environment. The strongest demand group that supports long-term housing prices is family units with stable incomes.
Fourth is residential product quality. In the same location, the preference for new builds is strengthening, and for older properties, it is important whether the quality can be improved through reconstruction, redevelopment, or remodeling.
Finally, there is price. No matter how good an area is, if expectations are already mostly reflected in the price, its investment appeal is bound to decrease.
Ultimately, picking good real estate is not just about buying a good area. It is a process of choosing a place that more people will prefer in the future, while it is still priced reasonably.
It is now time to move away from the mindset of choosing housing based solely on the “Seoul premium.” Of course, if you have sufficient financial capacity, core areas of Seoul remain one of the most stable choices. However, in situations where you cannot afford a core area in Seoul, there is no reason to seek answers only within the administrative district of Seoul.
If it is a core Gyeonggi region where high-paying jobs exist, transportation networks are improving, education and living infrastructure are provided, and young populations and real demand are continuously flowing in, it can have higher competitiveness than some areas of Seoul. Recent moves in Yeongtong, Suji, Dongtan, and Gwangmyeong are signals of this change.
When analyzing the capital area housing market in the future, we should not compare just the 25 autonomous districts of Seoul. We must place Seoul and Gyeonggi on a single map of living zones. We must look at where people earn their income, where they commute to, in which regions they want to raise their children, and in which direction future industries and transportation networks are expanding.
Over the next three years, housing demand in the capital region will not easily decrease, and supply in preferred areas will be difficult to increase significantly in the short term. In such an environment, the value of core Gyeonggi areas where demand is concentrating is likely to be re-evaluated.
The market standard is shifting from an era of buying a Seoul address to an era of buying a living zone that people actually want to choose. And right now, Gyeonggi is at the center of that change.