'Fluctuating' Gangnam House Prices, Jamsil Rescence Back to 1.9 Billion Won

Price Fluctuations Over 300 Million KRW in Half a Month
Simultaneous Appearance of Early Sales and Record Highs in Gangnam 3 Districts

A panoramic view of the Resentz apartment complex in Jamsil-dong, Songpa-gu, Seoul.

[Asia Economy Reporter Onyu Lim] The Resentz Apartments in Jamsil-dong, Songpa-gu, Seoul, which had sparked controversy over a sharp drop in Gangnam area housing prices due to transactions occurring several hundred million won below market value, have recovered their previous actual transaction prices. As rapid sales and record-high transactions continue mainly in the Gangnam area, forecasts on the housing price trend are also divided.

According to the Ministry of Land, Infrastructure and Transport's Real Transaction Price Disclosure System on the 3rd, a 7th-floor unit of 84㎡ in Resentz was confirmed to have been traded for 1.905 billion won on the 12th of last month (contract date basis). Resentz is the apartment that raised concerns about the start of a decline in the Gangnam market when an 8th-floor 84㎡ unit was traded for 1.6 billion won on the 6th of last month. Considering that a transaction was made for 1.975 billion won on the 29th of the previous month, the price repeated a sharp drop and rise of over 300 million won in less than half a month.

According to KB Real Estate, the median price of 84㎡ units in Resentz is currently around 1.93 billion won. A representative from real estate agency A near Jamsil-dong said, "Brokerages expected transactions in the 1.9 billion won range within March," adding, "The previous transaction was a contract between related parties, and there were no rapid sales priced about 300 million won below the market thereafter."

As transactions sharply contract and prices repeatedly fluctuate, the outlook on housing prices is also mixed.

According to the Korea Real Estate Agency's nationwide housing price trend for March, apartment sale prices in Gangnam, Songpa, and Seocho districts fell by 0.20%, 0.17%, and 0.13% respectively compared to the previous month. This is analyzed to be due to strengthened loan regulations and increased holding tax burdens. In particular, while the number of transactions drastically shrank from 742 in February to 220 in March, inexpensive rapid sales occurred consecutively in Daechi-dong Gaepo Woosung 2nd complex in Gangnam-gu and Banpo Jugong 1st complex in Seocho-gu.

On the other hand, there are also considerable claims that it is premature to say the market has entered a full-fledged downturn. This is because there are quite a few complexes with record-high prices exceeding previous transaction prices. On the 10th of last month, a 182㎡ unit in Shinhyundai 12th complex in Apgujeong-dong, Gangnam-gu, was traded for 4.5 billion won. This price is 600 million won higher than the previous highest price of 3.9 billion won in May last year. The 73㎡ Samsung Apartments in Dogok-dong were also traded for 1.6 billion won, 120 million won more expensive than before, and Jinju Apartments in Sincheon-dong, Songpa-gu, sold for 1.9 billion won, raising the record high by 100 million won.

A representative from real estate agency B in Banpo-dong said, "Some investors see the current price adjustment as a buying opportunity for Gangnam area apartments." In fact, according to the Korea Real Estate Agency's apartment sales transaction statistics by buyer residence, out of 911 transactions in the Gangnam 3 districts in February, 265 were by non-local buyers, accounting for 29.1%. This is the highest ratio since the Korea Real Estate Agency began compiling statistics in 2006.