The price difference between cheapest and most expensive apartments in the country is the widest as government efforts to tame the property market backfired.
According to KB Kookmin Bank on Monday, the average price of the top 20 percent of apartments across the country stood at W1.02 billion, compared to W116 million in the bottom 20 percent, or 8.8 times (US$1=W1,129).
The price gap soared to 8.1 times in October 2009 but then narrowed to 4.4 times in June 2015 during the Park Geun-hye administration. It started to grow again once President Moon Jae-in took office, reaching 4.7 times in May 2017, six times in October 2018, 7.1 times in February 2020, and 8.2 times in September 2020.
Prices of cheap apartments remained relatively flat while prices of luxury apartments went through the roof.
The average price of apartments in the bottom 20 percent edged down from W118.4 million in May 2017, when Moon took office, to W116 million last month, while the price of apartments in the top 20 percent surged 81 percent from W561 million to W1.02 billion.
In Seoul, the average price of the top 20 percent surged from W1.2 billion to W2.1 billion over the period.
The government's tougher tax policies ended up worsening the polarization. Kim Kwang-seok at property information app Real House said, "Multiple-home owners had to sell their property, leaving only one prized apartment in Seoul, so apartment prices in Seoul continue to soar but owners in some areas outside the capital may have to worry about plummeting prices."
