As polarization in the real estate market deepens, the rental prices for high-priced apartments and low-priced apartments have widened the most in two and a half years. While rental prices are on the rise in Seoul and the metropolitan area, they are declining in the provinces due to unsold inventory.
According to KB Real Estate, the price gap between high-priced and low-priced dwellings in the national apartment rental market last month was recorded at a quintile ratio of 7.7. This is the highest level since November 2022.
The quintile ratio is calculated by dividing the average rental price of the top 20% (fifth quintile) by the average of the bottom 20% (first quintile). A higher ratio indicates a larger price gap. As of June, the average for the fifth quintile was 678.49 million won, and the first quintile was 88.69 million won.
The average rental price in the fifth quintile in Seoul was recorded at 1.23817 billion won, while the first quintile was 280.84 million won. In other provinces excluding the metropolitan area and large cities, the fifth quintile averaged 329.83 million won, and the first quintile averaged 53.01 million won.
According to the Korea Real Estate Board (REB), rental prices in Seoul rose from 0.07% to 0.08% during the first week of July when the loan regulations were announced on June 27. In the metropolitan area, the increase continued from 0.05% to 0.03%.
In contrast, the provinces have experienced a continuous decline in rental prices for 30 weeks since the first week of December last year, at -0.01%.
The rental supply-demand index for the first week of July, surveyed by the Korea Real Estate Board (REB), showed that demand in Seoul was greater than supply at 102.0. Meanwhile, in the provinces, the index stood at 95.2, indicating that supply exceeded demand.
As of the end of May this year, the unsold inventory after completion accounted for 83% of the national total in the provinces, indicating a lack of demand for dwellings.