Medical school expansion plans affect housing market

Medical school students take the Hippocratic oath during a commencement ceremony at Daegu Catholic University, Friday. Yonhap

The real estate market in Seoul and provincial school districts is buzzing with anticipation following the government's announcement of an increase in medical school admission quotas.

According to the Korea Real Estate Board (REB), Sunday, the jeonse price of Seoul apartments in 2024 as of the first week of February rose 0.43 percent compared to the same period last year. The jeonse system in Korea allows tenants to provide landlords with a significant deposit instead of monthly rent.

"The upward trend continued as demand for housing in preferred regions, such as school districts, increased, while the availability of real estate that can be newly contracted decreased," the REB said.

This surge was primarily driven by the popular school districts in Seoul, such as Nowon, Gangnam, Yangcheon and Seocho districts, known for their schools' impressive track records in sending students to prestigious universities.

For instance, a 161 square-meter apartment on the 38th floor in Mok-dong, Yangcheon District, was recently leased for a jeonse of 2 billion won ($1.49 million). This set a new record, surpassing the previous high of 1.48 billion won for an apartment of the same size on the 37th floor in October 2016.

These areas also draw students who plan to retake the national college entrance exam since they have a high density of test preps and college consulting agencies.

Students and their guardians attend a presentation on medical school admissions by Megastudy, Korea's largest test preparation company, after the government announced it will raise the annual enrollment quota at medical schools, at one of its branches in Seoul, Tuesday. Yonhap

The excitement isn't confined to Seoul alone. With the government's goal to address regional disparities in medical services by favoring students from local areas, an interest in relocating to outside Seoul is growing.

A member of a real estate community with more than 2 million users said, "The government has announced plans to allocate 60 percent of admissions to regional applicants. To qualify, students must have completed both middle and high schools in the [qualifying regions]. For those aspiring to secure a spot in medical school, relocating to Gangwon Province could be a strategic move. The region has a low population of school-age children."

Another area expected to benefit from the quota hike is the Chungcheong region, given its proximity to Seoul and Gyeonggi Province and cities that host numerous academic institutions.

Despite the anticipation surrounding the medical school quota adjustments, analysts are skeptical about a significant uptick in families relocating to specific regions solely for admissions purposes.

"Some families might relocate, but we don't foresee a major immediate impact on the market," Song Seung-hyun, head of the real estate consulting firm Urban and Economy, said.

"However, rental prices in [major city] areas, seen as advantageous for gaining medical school admission, could be the first to see price adjustments. The concentration of younger generations in school districts within these regions may influence the pricing dynamics."