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Gangnam apartment prices jump 84 times in 40 years

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By Kim Bo-eun

The price of apartments in the affluent district of Gangnam in southern Seoul has risen more than 80 times over the last 40 years, growing far faster than basic living costs, such as rice, data showed, Sunday. According to data from the Hana Institute of Finance, the price per 3.3 square meters of an Eunma Apartment in southern Seoul was 64.67 million won this year, 83.5 times the estimated price of the same apartment in 1980, which was 770,000 won.

Data showed prices of apartments in southern Seoul showed a significant increase every 15 years. The first jump came between 1988 and 1991, when Korea enjoyed an economic boom from the depreciated dollar, as well as low oil prices and low interest rates. This was also a time when there was a housing shortage in Seoul.

The second price jump occurred between 2002 and 2005, when low interest rates continued and household loans grew. The final jump took place between 2018 and 2020, under the current Moon Jae-in administration's policies to curb demand for real estate trading.

The growth rate of GDP per capita in the same period was 18.5 times, according to dollar rates.

The price of apartments in Seoul rose by six times over 35 years, from 1986 to 2019. This compares with the price of apartments nationwide, which rose by five times over the same period.

Meanwhile, the price of groceries such as rice or chicken, showed only a small increase.

The price of 4 kilograms of rice was 3,000 won in 1980. This grew by 3.2 times to 9,500 won in 2020. One kilogram of chicken, which was 1,400 won in 1980, rose 3.3 times to 4,656 won.

The price of coke and soju, each grew by 4.5 times and 5.1 times. However, the price of coffee jumped 21 times, from 200 won to 4,100 won.

Subway fares grew 1.56 times from 800 won to 1,250 won. Taxi fares grew by 9.5 times.

Tuition for private elementary schools surged by 44.5 times, and tuition for state-run universities 19.1 times.

"The price of food has become significantly cheaper compared with the 1980s, due to the Korean economy's rapid growth, as well as growth in productivity and trade," Jung Hoon, a researcher of the institute, said.

"On the other hand, urbanization and demand for quality housing has driven growth in the demand for apartments, but a shortage in supply in metropolitan areas and policies intended on curbing demand, as well as high liquidity have resulted in significant rises in apartment prices."

Kim Bo-eun


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