Gap in housing prices widens among Korean cities

Housing prices in major metropolitan cities in South Korea have soared so far this month on-year, showing a stark contrast to drops in provincial regions, data showed Sunday.

Busan, the second-largest city in Korea, showed an 11 percent surge in real estate prices on-year in June, the highest among cities in the nation, according to data by real estate market tracker Budongsan 114.

The average apartment price per square meter in Busan reached 2.93 million won ($2,600), while the average in June last year stood at 2.64 million won.

Apartment prices in Seoul rose 7.3 percent to 5.89 million won per square meter. 

Housing prices per square meter on Jeju Island soared 7.3 percent to 3.1 million won, whereas those of Sejong jumped 7.1 percent to 2.73 million won.

Other regions that showed steeper rises than consumer price inflation of 1.9 percent as of April included cities such as port city Incheon and Daejeon, as well as the nation’s most populous province Gyeonggi Province,

Some provincial cities, however, saw drops in residence prices.

The average housing price in Daegu edged down 0.8 percent to 2.64 million won.

North Gyeongsang Province saw a slide in prices of 1.2 percent on-year to 1.64 million won per square meter. The average price in North Chungcheong Province shed 0.5 percent to 1.81 million won.

The contrasting trends are expected to pose a burden on the respective local economies, the report indicated.

The heated real estate markets in cities such as Seoul and Busan are prone to speculation and illegal transactions of house reselling rights, while the real estate markets in provincial cities are burdened by lackluster transactions. The number of unsold apartments in North Chungcheong Province, for instance, jumped 30.4 percent to 5,755.

By Son Ji-hyoung (consnow@heraldcorp.com)