Lecture by Kim Hak-ryul, head of SmartTube Real Estate Research Institute
'No area where jeonse keeps rising has ever seen sale prices fall'
Seoul move-in cliff to continue... 'Next year will see differentiation by area and product'
"What is driving home prices right now is not investment demand — it is end-user demand. Ultimately, you have to watch where those end users are moving. Going forward, this will not be a market where every area rises together. Only the areas that deserve to rise will rise."
Kim Hak-ryul, head of SmartTube Real Estate Research Institute and widely known by his online handle "Ppasong," predicted that differentiation by area and product type will intensify in next year's real estate market. With Gangnam seeing a correction, demand has been shifting toward lower- and mid-priced areas in northern Seoul and southern Gyeonggi Province. Kim said that trend will narrow further in 2027, with price movements concentrating on scarce, high-value products such as newly built units, large complexes and transit-oriented developments, even within the same neighborhood.
Kim made the remarks Friday at a lecture titled "Will home prices rise or fall next year?" at Herald Money Festa 2026, held at Art Hall 1 of Dongdaemun Design Plaza in Seoul. He opened by dismissing both extremes: "It is wrong to say the whole country is going up, and it is wrong to say the whole country is going down. 2027 will be the year areas and products diverge."
Assessing the recent Seoul housing market, Kim said, "If you look at Gangnam taking a breather and conclude the market is over, you have only been watching Gangnam." He added that tighter lending regulations have priced end users out of mid-range homes, pushing them toward the outskirts of Seoul and then further into Gyeonggi Province and Incheon.
"Investors can choose not to invest, but end users have to live somewhere," he said. "They adjust to whatever loan limit they can get — so they move to the outskirts of Seoul, and if they still cannot afford it there, they move to Gyeonggi Province or Incheon."
Kim identified the jeonse market as the key variable shaping next year's housing outlook. "Sale prices are the result; jeonse prices are the cause," he said. "Because there is no investment demand in jeonse, rising jeonse prices are the most honest signal that real residential demand in that area is growing."
He warned that Seoul could face "a level of jeonse shortage unlike anything seen before" next year, as a drop in new move-ins coincides with a scarcity of jeonse listings.
"Historically, there has not been a single area where sale prices fell while jeonse prices kept rising consistently," Kim said. "If you want to know where home prices are headed next year, look at the jeonse asking prices in that area right now."
He also argued that the recent price declines in Gangnam should not be read as a trend reversal, citing three reasons: the cause of the decline is not a disappearance of demand; jeonse prices in the area remain at record highs and the shift toward partial-jeonse arrangements is increasing; and the link through which Gangnam weakness could spread to the outer parts of Seoul has weakened.
"The price gap between the top, middle and lower tiers of the housing market has widened so much that the buyer pools themselves are now different," he said. "A drop in Gangnam home prices does not automatically weaken end-user demand in the outer parts of Seoul."
On the government's Aug. 13 rapid housing supply plan, Kim said that while the long-term direction of expanding supply is sound, a timing gap means it cannot resolve next year's supply shortage.
"A home announced today will not be ready to move into until 2030 at the earliest," he said. "The units available for move-in in 2027 are already fixed." He added that short-term lending and tax regulations can slow transaction activity, but with the volume of already-started construction set, they cannot immediately reverse the supply-demand balance.
Kim also laid out five choices to avoid in next year's real estate market. He cautioned against: selling a Seoul property simply because Gangnam prices have dipped; concluding that supply concerns have been resolved based solely on the government's supply plans; buying indiscriminately across Gyeonggi Province on the assumption that the whole province will rise; offloading higher-value properties first to reduce tax burdens; and continuing to delay purchases while waiting for interest rate cuts.
Near the end of the lecture, a woman in her 30s who had brought her preschool-age son to the event asked Kim a question directly. "I had been agonizing over whether to choose a mixed-use residential building in Dongdaemun-gu or an apartment in Gangdong-gu, and the lecture gave me a clear sense of direction," she said. "I had particularly been worrying about how home prices would move next year, and listening today helped me sort out my thinking."
Now in its third year, Herald Money Festa is running Friday and Saturday under the theme "Money Rebalancing: Recalibrating the Weight of Your Assets." The two-day event features lectures covering the full spectrum of personal finance — from shares, ETFs, real estate, gold and virtual assets to wealth management, tax planning and inheritance — giving attendees a chance to reassess their investment strategies and portfolio balance amid a rapidly shifting financial environment.
quq@heraldcorp.com
