Suwon Sees Smaller Increase but Still Up 0.3%... Seoul Non-Gangnam Area Continues to Rise

[Asia Economy Reporter Yuri Kim] Following the announcement of the February 20 real estate measures last week, the rate of increase in apartment prices in Suwon, designated as a regulated area, shrank to about half compared to the previous week. However, with positive factors such as the extension of the Shinbundang Line continuing, prices rose by 0.30% this week, surpassing the average increase rate in the Seoul metropolitan area. In Seoul, demand for mid- to low-priced apartments under 900 million KRW continued intermittently, leading the rise in districts such as Gwanak, Nowon, Dobong, and Guro. The decline in major redevelopment complexes in the Gangnam area, which had been weakening since early February, has somewhat slowed. Meanwhile, due to the impact of COVID-19, fewer people are visiting real estate agencies and are reluctant to show houses, making the transaction market even quieter.

According to Real Estate 114 on the 28th, the apartment price increase rate in Seoul this week was 0.06%, up 0.03 percentage points from last week. Redevelopment apartments rose by 0.01%, and general apartments by 0.07%. Additionally, new towns and Gyeonggi/Incheon rose by 0.03% and 0.12%, respectively.

In Seoul, demand for mid- to low-priced apartments continued, with increases in Gwanak (0.26%), Nowon (0.25%), Dobong (0.23%), Guro (0.18%), Dongdaemun (0.18%), Gangbuk (0.13%), and Seongbuk (0.13%). In Gwanak, prices rose by 4 million to 12.5 million KRW in areas such as Geonyeong 3rd Complex and Sillim Prugio in Sillim-dong, as well as Doosan in Bongcheon-dong and Seonghyeon Donga. In Nowon, prices increased by 10 million to 20 million KRW in Sangye-dong’s Sangye Station Daerim and Sangye Jugong 7 Complex, Junggye-dong’s Gyeongnam Honorsville, and Sinan. In Dobong, prices rose by 2.5 million to 15 million KRW in Banghak-dong’s Shindong-A 1 Complex, Chang-dong’s Sangye Jugong 19 Complex, and Ssangmun-dong’s Hanyang 7th Complex. Meanwhile, Gangnam, Seocho, and Songpa, which all recorded negative changes last week, remained stable (0.00~0.01%) as the decline in redevelopment complexes slowed.

New towns such as Bundang (0.08%), Sanbon (0.06%), and Dongtan (0.05%) saw price increases. In Bundang, prices rose by 5 million to 15 million KRW in Gumi-dong’s Mujigae LG and Mujigae Daerim, Yatap-dong’s Maehwa Government Employee 2 Complex, and Seohyeon-dong’s Shibeom Hanyang. In Sanbon, prices increased by 2.5 million to 15 million KRW in Sanbon-dong’s Jumong Village Daerim and Jugong 11 Complex, and Geumjeong-dong’s Chungmu 2 Complex Jugong. In Dongtan, prices rose by 5 million to 10 million KRW in Song-dong’s Dongtan 2 New Town House The Lake, Neung-dong’s Dongtan Forest Village Pungsung Shinmiju, and Cheonggye-dong’s Dongtan 2 Hoban Verdiem The Class.

In Gyeonggi and Incheon, Suwon (0.30%), Yongin (0.25%), Gwangmyeong (0.18%), Guri (0.16%), Anyang (0.16%), Hwaseong (0.16%), and Gunpo (0.15%) led the price increases. Although the rate of increase in Suwon slowed significantly after being designated as a regulated area, it still showed the highest increase rate in the metropolitan area. Prices rose by 10 million to 20 million KRW in Hwaseo-dong’s Hwaseo Jugong 4 Complex, Seryu-dong’s Suwon LH Central Town 1 Complex, and Gwonsun-dong’s Gwonsun SK View. In Yongin, prices increased by 15 million to 20 million KRW in Sanghyeon-dong’s Sanghyeon Seongwon 1st Complex, Sinbong-dong’s Sinbong Xi 2nd Complex, Mabuk-dong’s Samgeo Village Samsung Raemian 1st Complex, and Yeongdeok-dong’s Heungdeok Village 11th Complex Gyeongnam Honorsville. In Gwangmyeong, prices rose by 5 million to 20 million KRW in Haan-dong’s Jugong 2 Complex, Cheolsan-dong’s Jugong 12 Complex, and Gwangmyeong Doosan We've Tragus.

The jeonse (long-term lease) market did not see a significant increase in spring moving demand due to the impact of COVID-19, but the upward trend continued mainly in areas close to workplaces. Seoul rose by 0.05%, while new towns and Gyeonggi/Incheon increased by 0.03% and 0.04%, respectively.

In Seoul’s jeonse market, the upward trend continued due to a shortage of listings, with increases in Gwanak (0.14%), Gangnam (0.10%), Seongdong (0.10%), Seongbuk (0.10%), Dongjak (0.09%), Gangbuk (0.08%), Yangcheon (0.08%), and Jongno (0.08%). In Gwanak, prices rose by 5 million to 10 million KRW in Bongcheon-dong’s Byeoksan Blooming, Donga, and Doosan. In Gangnam, large-area apartments such as Tower Palace and Daerim Acroville in Dogok-dong, Ssangyong Platinum and Jinheung in Samseong-dong rose by 50 million to 75 million KRW. Lim Byung-chul, senior researcher at Real Estate 114, pointed out, "There is concern that the jeonse prices in surrounding areas may become unstable due to the relocation of redevelopment in Gangnam’s Cheongdam Samik and Seocho’s Sinbanpo 4 District."

New towns saw increases in Bundang (0.05%), Ilsan (0.05%), Pangyo (0.05%), Pyeongchon (0.04%), Dongtan (0.04%), and Wirye (0.04%). In Gyeonggi and Incheon, similar to the sales market, jeonse prices showed strength in the southern Gyeonggi area. By region, Anyang (0.11%), Yongin (0.08%), Gunpo (0.07%), Suwon (0.07%), Hwaseong (0.07%), and Hanam (0.06%) rose.

Senior researcher Lim said, "Following the launch of the real estate market illegal activity response team last week, from March, submission of documents for transaction verification such as funding plans will be strengthened. Moreover, due to the spread of COVID-19, people are refraining from outdoor activities, so a contraction in the transaction market is inevitable for the time being." However, he added, "Given the abundant liquidity, there is still potential for investment demand inflow into non-regulated areas where prices have risen relatively less or mid- to low-priced apartments under 900 million KRW."

Meanwhile, the jeonse market is not seeing a significant increase in demand ahead of the full-fledged spring moving season. However, due to a general shortage of jeonse listings in the metropolitan area and a 40% decrease in apartment move-in volumes in the metropolitan area in March compared to the same period last year, unstable movements in jeonse prices are expected to continue.