Efforts to rein in house prices are fuelling discontent in Seoul

JUDGING FROM the chatter on the streets of Gangnam, it is a bad time to buy property in the South Korean capital. “It’s been a nightmare looking for an apartment,” says Lee, a 30-year-old who lives in a rented studio in the glitzy district in southern Seoul. “I think about what to buy and where and a month later the price has gone up by 20%.” Although he has a good job at a big company and is planning to buy with his girlfriend, he worries they’ll have to keep renting for now. “The government says they want to fight the rich, but actually they’re hitting the middle class.”

In recent months such complaints have become more common. Greater Seoul is home to half of South Korea’s population and to the vast majority of attractive jobs, schools and entertainment options. Few people with any ambition can afford not to move there. But affording the move is hard. Residential property prices in the capital have risen by around 40% over the past three years, according to official statistics; in that time, the prices of flats have gone up by 52%, suggests analysis by KB Kookmin, a bank. The rises have been fuelled in large part by demand for scarce high-quality flats in popular districts such as Gangnam.

The government, spying a speculative bubble, has introduced around two dozen measures to cool the market over the past three...