- The average home price in Seoul, South Korea, rose by 22% year over year in 2020.
- That’s the biggest price increase of any major city in Asia, per a new report from Knight Frank.
- Home prices in New Zealand, Turkey, and Russia also saw major increases.
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Home prices in Seoul are taking off.
The South Korean city saw a 22% increase in home prices from Q4 2019 through Q4 2020, according to a new report from global wealth consultancy Knight Frank.
It’s the biggest price increase among all major cities in Asia, and it far eclipses the next-highest price change amongst cities in the region. No other city tracked a greater than 10% increase in the same time period.
Seoul, a city of around 9.9 million, is trying to position itself as an alternative to Asia’s financial hubs, and many locals are finding themselves priced out of the real estate market.
The city has faced an increasingly dire affordability crisis since President Moon Jae-in took office in 2017. Despite the government announcing nearly two dozen measures to curb increases over the past three years, home prices in Seoul have risen by 50% since 2017, per a Reuters report.
Skyrocketing home prices in cities across New Zealand and Russia
Urban home prices globally increased by an average of 5.6% in 2020, Knight Frank reported. That’s up from 2019, when home prices saw a 3.2% increase.
In a press release, Victoria Garrett, head of residential, Asia-Pacific, for the firm said buyer confidence is expected to grow with vaccine rollout and addressed fears of a housing bubble.
“Governments are now starting to watch residential markets closer to minimise the risk of asset bubbles,” Garrett said.
The three biggest home price changes over the 12-month period were all recorded in Turkey, though the report notes price growth in Turkey is linked to high inflation and changes with the lira. Ankara, Izmir, and Istanbul led the ranking with 30.2%, 29.4%, and 27.9% changes respectively.
New Zealand’s home prices are also taking off, with two major cities — Auckland at a 26.4% increase and Wellington at 18.4% — ranking among the top 10 cities globally. Bloomberg recently reported that the housing market in New Zealand is “brutal,” citing a dilapidated bungalow in an Auckland suburb that sold for NZ$1.81 million and a national median home price that’s 6.7 times higher than the average annual income.
Russian cities, too, made appearances in the report’s top ten rankings with St. Petersburg (25.4% increase) and Moscow (21.2% increase) at No. 5 and No. 7 respectively.
For its global residential cities index, Knight Frank tracks the movement in mainstream residential prices across 150 cities worldwide.