Seoul Reconstruction Apartment Prices Down for 2 Weeks... "Non-Gangnam Areas Lead Increase, Gangnam Area Watches"

[Asia Economy Reporter Yuri Kim] While the rate of increase in Seoul apartment prices has slowed, Seoul reconstruction apartments have declined for two consecutive weeks. Following the December 16 real estate measures last year, the president hinted at strong follow-up measures during the New Year's press conference, significantly slowing the rate of increase compared to before the measures, especially in the Gangnam area where high-priced apartments are concentrated. The reconstruction market in Songpa-gu continued its downward trend from last week, and the price of reconstruction apartments in Gangnam-gu turned to a decline for the first time in 18 weeks since September last year. In Songpa, Jamsil-dong Jugong Complex 5 fell, and in Gangnam, Daechi-dong Eunma Apartments dropped.

According to Real Estate 114 on the 17th, Seoul apartment prices rose by 0.09% this week, maintaining a similar trend to last week. Reconstruction apartments fell by 0.02%, declining for two consecutive weeks, while general apartments rose by 0.11%. New towns and Gyeonggi·Incheon each increased by 0.03%.

The Seoul apartment market was led by price increases in mid- to low-priced apartments mainly in non-Gangnam areas such as Guro, Geumcheon, Nowon, and Dobong, where transactions occurred intermittently. On the other hand, the Gangnam area showed a deeper wait-and-see stance. By region, the increases were in the order of Guro (0.25%), Gangdong (0.18%), Nowon (0.18%), Geumcheon (0.15%), Dobong (0.15%), Seodaemun (0.15%), Mapo (0.14%), and Yangcheon (0.12%). In Guro, Jugong Complex 1 in Guro-dong, Guil Woosung, Samho in Gaebong-dong, and Daerim Complex 2 in Sindorim-dong rose by 5 million to 25 million KRW. In Gangdong, Myeongil Samhwan in Myeongil-dong, Gwangnaru Samsung in Amsa-dong, Dunchon Prugio in Dunchon-dong, and Godeok Raemian Hillstate in Godeok-dong increased by 10 million to 40 million KRW. In Nowon, Samho Complex 4 in Wolgye-dong, Sanggye Jugong Complex 5 in Sanggye-dong, and Cheongsol in Hagye-dong rose by 5 million to 30 million KRW.

New towns saw increases in Pangyo (0.10%), Ilsan (0.04%), Sanbon (0.04%), Bundang (0.03%), Jungdong (0.02%), Pyeongchon (0.01%), and Gwanggyo (0.01%). In Pangyo, Botdeulmaeul Complex 1 Pungseong Shinmiju in Sampyeong-dong and Pangyo Wonmaeul Complex 2 rose by 15 million to 25 million KRW. In Ilsan, some buying demand flowed in, raising prices by 5 million to 15 million KRW in Baekseok-dong Ilsan Yojin Y City, Ilsan-dong Hugok Complex 8 Dongsin, Hugok Complex 9 LG, and Lotte. In Sanbon, Gaya Complex 5 Jugong Complex 1 in Sanbon-dong increased by 2.5 million to 5 million KRW.

In Gyeonggi·Incheon, prices rose mainly in the southern Gyeonggi area. By region, Suwon (0.11%), Anyang (0.09%), Gwacheon (0.07%), Seongnam (0.06%), Gwangmyeong (0.05%), Uiwang (0.05%), Namyangju (0.04%), and Hwaseong (0.04%) increased. Suwon, recognized as an undervalued area, continued to see steady demand, and the preliminary feasibility study for the Shinbundang Line extension project from Suwon to Homaesil passed, acting as a positive factor.

The jeonse (long-term lease) market showed an upward trend as supply was generally insufficient and new semester demand increased. In particular, Seoul apartment jeonse prices rose by 0.10%, surpassing this week's sales increase rate (0.09%). Additionally, new towns and Gyeonggi·Incheon rose by 0.01% and 0.02%, respectively.

In Seoul, jeonse prices rose as new semester demand continued amid a general shortage of jeonse supply. By region, increases were seen in Geumcheon (0.30%), Songpa (0.21%), Yangcheon (0.19%), Gangnam (0.18%), Dongdaemun (0.18%), Gangbuk (0.17%), and Seocho (0.12%). In Geumcheon, demand flowed into large-scale new apartments, raising prices by 10 million to 15 million KRW in Lotte Castle Gold Park Complex 1 and 2 in Doksan-dong. In Songpa, Yangcheon, and Gangnam, jeonse prices rose due to new semester demand. In Songpa, Sincheon-dong Jamsil Parkrio and Jamsil-dong Jamsil Els increased by 10 million to 50 million KRW. In Yangcheon, Sinjeong-dong Daerim Acroville, Samsung Sherbill Complex 1, and Mok-dong Hyundai Hyperion II rose by 25 million to 50 million KRW.

New towns saw increases in Ilsan (0.06%), Pyeongchon (0.03%), Jungdong (0.02%), and Bundang (0.01%). In Ilsan, Hugok Complex 8 Dongsin in Ilsan-dong, Gangseon Complex 2 Gyeongnam, and Gangseon Complex 19 Woosung in Juyop-dong rose by 5 million to 10 million KRW. In Pyeongchon, Mugunghwa Geonyeong and Mugunghwa Taeyoung in Hogye-dong increased by 5 million to 10 million KRW, and in Jungdong, Dong-a in Sang-dong rose by about 5 million KRW.

In Gyeonggi·Incheon, Suwon (0.04%), Goyang (0.03%), Namyangju (0.03%), Seongnam (0.03%), Uiwang (0.03%), and Uijeongbu (0.03%) increased. In Suwon, Hanil Sinan in Cheoncheon-dong, Byeokjeokgol Samsung in Yeongtong-dong, and e-Pyeonhansesang Yeongtong Complex 2 in Mangpo-dong rose by 10 million KRW. In Goyang, Wish City Blooming Complex 5 in Siksa-dong and Dongsan Village Complex 22 Hoban Verdiem in Dongsan-dong rose by 5 million KRW. In Namyangju, Mirinae Village Hanwha Dream Green in Byeollae-dong and Byeoksan and Doosan We’ve in Wabu-eup increased by 5 million to 7.5 million KRW. On the other hand, Pyeongtaek (-0.03%) and Siheung (-0.02%) declined due to supply pressure from new apartment move-ins.

Lim Byung-chul, chief researcher at Real Estate 114, said, "Following the December 16 real estate measures, high-intensity additional measures such as tax strengthening are anticipated, so a slowdown in the upward trend due to overall sluggish transactions is expected." He forecasted that the government's high-intensity regulatory policies would somewhat block speculative demand. However, due to strengthened loan regulations, demand is expected to concentrate in Seoul's outskirts, non-regulated areas in the metropolitan area, and undervalued areas, making localized price increases likely to continue.