Just days after the June 4 election, data showed that apartment prices in Seoul surged at their fastest pace this year. According to the Korea Real Estate Board, apartment prices in the capital rose 0.26 percent in the second week of June, matching the peak levels seen during the previous property boom in August 2024.
The rally, which began in Seoul's affluent southern districts of Gangnam, Seocho and Songpa, has since spread to areas north of the Han River, including Yongsan and Mapo, as well as parts of Gyeonggi Province that surrounds the capital, such as Gwacheon and Bundang. Experts attribute the latest price surge to a combination of factors.
With political uncertainty lifted following the election, expectations for a liquidity boost -- through the incoming administration's proposed minimum 20 trillion won (US$14.6 billion) supplementary budget and potential interest rate cuts -- have fueled demand in the housing market.
On the campaign trail, Lee pledged a supply-focused housing policy, distancing himself from the regulation-heavy approach of former liberal President Moon Jae-in. But experts caution that unrestrained demand could lead to a repeat of the rapid price escalation seen between 2017 and 2021, a period widely viewed as a policy misstep under the Moon administration.
The Lee government has yet to unveil its detailed real estate policy, with key ministerial and vice-ministerial appointments still pending.
The presidential state affairs committee, effectively serving as Lee's transition team, is expected to present a comprehensive blueprint and policy direction in the coming weeks. In the meantime, financial authorities have begun to act.
The Financial Services Commission and the Financial Supervisory Service held a closed-door meeting with key local lenders, urging them to tighten lending practices in response to the overheating market.
Acting Finance Minister Lee Hyoung-il also chaired an interagency meeting last week to assess housing market conditions and pledged to mobilize all available policy tools to prevent speculative behavior and market disruptions.
Market watchers say further regulations, including stricter lending rules, appear inevitable to rein in price growth.
Some analysts say the Bank of Korea (BOK), which has cut its policy rate by 0.75 percentage point since late last year and signaled the possibility of additional rate cuts in the second half to support the economy, may slow the pace due to risks related to the property market.
