Seoul has solidified its position as a real estate hub due to the city's thriving economy and status as a major global business center. For years, Seoul has steadily attracted both domestic and international investors seeking lucrative opportunities in the real estate market.
As the capital of South Korea, Seoul's population density and limited land availability have driven property prices steadily upwards, making it an attractive destination for those looking to invest in high-value properties. The city's well-developed infrastructure, modern amenities, and cultural attractions also contribute to its appeal for real estate investment.
And to add to this, Seoul's government policies and regulations are aimed at promoting sustainable development and urban planning, which further boosted confidence in the real estate market. Standing out as a vibrant and dynamic city that offers diverse opportunities for investors, Seoul is what you're looking for if you're seeking long-term growth and profitability.
Real Estate Trends and Insights for 2024 in Seoul, South Korea
Bloomberg reports that China's property market is struggling, as many are fleeing the mainland and moving all across Asia. This leaves room for countries like India, Vietnam, and South Korea to strategize. Projected to reach a value of US$26.69tn in 2024, Seoul, South Korea is also expected to reach a compound annual growth rate of 1.91% from 2024 to 2028.
Trends and Insights for Residential Areas in Seoul in 2024
Senior housing is a strong market to tap right now, as the elderly population has nearly doubled in South Korea. People who are aged 65 and beyond surpassed those who are in their 20s and 30s, with 12% and 13% respectively. South Korea is Projected to be a “super-aged" society, South Korea's population of those aged 65 or over exceeds 20%. And while interest in the senior housing market is still in its early stage, there are still many areas and factors to consider and explore.
Meanwhile, Statista reports that a demand for luxury apartments is expected, especially in major cities. As mentioned above, China's mainlanders are moving across Asia, which creates room for more demand on housing in areas like South Korea or Vietnam. Additionally, there have been trends among gateway cities like Shanghai and Seoul of converting office spaces into housing. Driven by both necessity and demand, this can largely be attributed to the need for convenience – there has been a preference for proximal locations to peoples' jobs to avoid any traffic or discomfort.
Trends and Insights for Commercial Areas in Seoul in 2024
According to CBRE Korea, there's an anticipated limit in the availability of leasable office spaces. And while there was a some level recovery in terms of supply this year, this excludes pre-leased areas and owner-occupied assets. However, supply is reportedly supposed to recover from 2026 onwards. Some signs for this projected development include real estate projects that are currently being constructed in Seoul's east CBD.
Meanwhile, market conditions are projected to continue being favored by landlords. There will be intensified competition and rent is also said to increase due to the abovesaid Chinese property market struggle, as well as demand. Current tenants are considering renegotiating and renewing their contracts, which keeps the amount of new leases low. But overall, Seoul's office market still stands strong amidst crises and competition.
Trends and Insights for Mixed Use Areas in Seoul in 2024
Mayor Oh Se-hoon announced plans of revitalizing the area of Han River. It's been estimated that 550 billion won – or an equivalent of $400 million – will be allotted for the project. It was also mentioned that 313.5 billion won will come from the private sector and 236.6 billion won will come from the government.
Some plans of the city government include building a floating hotel complete with various amenities on the river near Yeouido Island. Slated to begin in 2026, this project will be carried out by private construction firm/s. Meanwhile, floating cafes and restaurants are going to be built as well to give both locals and tourists a chance to experience both Korean and international cuisines as they explore the area.
Additionally, this project includes a water ski zone, and the construction of urban marinas, specifically in the areas of Ichon and Jamsil. It was reported that berthing services will be offered here. There is also a passenger terminal that connects the Han River and the West Sea, which is set to be built in the second half of 2026, also in Yeouido.
Finally, the city also plans to open a huge windsurfing park, which is located at the eastern riverside district of Seoul. Open to the public, this windsurfing park will organize myriad cultural events like boat parades and even movie screenings for the people to enjoy.
Investments in Real Estate
For Seoul, there are upcoming interest rate cuts which could encouragement investment activity from domestically and internationally. Even if there are still high rates and limited liquidity for now, real estate investments can still see a boost in numbers due to the enticing interest rate slashes.
Additionally, corporate investors are also slated to emerge as major capital sources, which boosts investment cases for office acquisition. Cap rates are showing a continued slight upward trend, with the spread in cap rates by region in the office market expected to gradually decrease. Meanwhile, the logistics sector is also bound to vary more in cap rates.
Other Real Estate Forecasts for 2024
Yoon Suk Yeol, the President of South Korea recently touted his administration's policy efforts as the driving force behind the stabilization of the housing market. The president claims that his conservative administration will "spare no efforts to further stabilize the housing market" since the interest rates and the cost of construction are staying at high levels, which prove to make it harder to access housing supply in Seoul. In turn, prospective homeowners in the city are suffering from a shortage of housing options that are budget-friendly enough for its citizens.
President Yoon further says that now is "the [optimal] time to normalize the housing market, given the time it takes for [the implemented policy] to lead to the actual house construction." Meanwhile, 11 real estate experts were surveyed with regards to housing prices, and 8 of them predicted a rise (specifically in Seoul), 2 expecting a decline, and one of them expecting a flat rate.