As of early 2020, the government plans to raise the officially assessed prices of apartments, worth more than 900 million won, to realistic levels. The government then aims to accordingly levy higher real estate taxes based on these higher, more realistic prices. It is claimed that more expensive pieces of real estate are deliberately being undervalued at the moment. Prices in expensive areas, such as the Gangnam district, are expected to rise by 20 to 30 percent, with taxes rising by at least fifty percent.
Part of the problem is that the most attractive pieces of real estate are concentrated in the capital city of Seoul and its surrounding regions. As the most populous, cultural, commercial, and industrial center, generating half of the nation’s gross domestic product (GDP), this area contains the most lucrative real estate in the country. The most expensive areas to live in Seoul are in the Gangnam district, at over 53 million won per pyeong (approximately 45 thousand U.S. dollars per 3.3 square meters), followed by the Seocho district, at almost 48 million won per pyeong. Interestingly, 80 percent of the most expensive apartments, those worth over 900 million won, were situated in Seoul. Furthermore, over half of all residential housing transactions, over 950 thousand, occurred in the capital area.
The real estate and leasing sector of the Korean economy is increasingly accounting for a larger share of the GDP. As of 2017, it was expected to be worth over one hundred trillion South Korean won (approximately 86.5 billion U.S. dollars). Meanwhile, the total number of buildings in Korea is continuing to increase, rising from around 6.6 million buildings in 2009 to around 7.2 million in 2018. Around two-thirds were residential buildings. Around 40 percent of respondents in a 2019 survey said they expected housing prices to rise further in the next year, while around 30 percent said they expected the prices to stabilize.