Gangnam 3 Districts, Mayongseong, Nodogang to Geumgwan District
Record Highs Surge... Investors Develop Resistance to 21st Regulation
[Asia Economy Reporter Onyu Lim] Despite the twenty-first real estate measures aimed at stabilizing housing prices, apartment prices in Seoul continue to rise. Not only in the Gangnam area, which includes four neighborhoods in Gangnam and Songpa districts designated as land transaction permission zones, but also in 'Mayongseong (Mapo, Yongsan, Seongdong districts)' and areas with many apartments priced under 900 million KRW such as 'Nodogang (Nowon, Dobong, Gangbuk districts)' and 'Geumgwan-gu (Geumcheon, Gwanak, Guro districts)', record-high prices are being reported daily.
According to the Ministry of Land, Infrastructure and Transport's real transaction price disclosure system on the 5th, on the 20th of last month, a 121㎡ (exclusive area) apartment in Dongbu Centreville, Daechi-dong, Gangnam-gu, Seoul was traded at 3.5 billion KRW, 100 million KRW higher than the previous highest price. The 105㎡ apartment in Lotte Castle, in the same neighborhood, also set a new record by selling for 2.05 billion KRW a day later. Daechi-dong was designated as a land transaction permission zone along with Samsung and Cheongdam-dong in Gangnam-gu and Jamsil-dong in Songpa-gu under the June 17th measures. The government introduced the land transaction permission zone card due to concerns about real estate speculation in the area influenced by projects such as the Jamsil MICE development and Yeongdong-daero complex development.
However, on the regulation enforcement date of the 23rd of last month, transactions surged, resulting in a sharp rise in housing prices contrary to the government's intentions. A real estate industry insider analyzed, "Since this is the twenty-first real estate measure, investors have become resistant," and "expecting housing prices to continue rising, purchases at record-high prices were made before the regulations."
After the regulation took effect, transactions in this area abruptly stopped. However, a balloon effect occurred in surrounding areas, fueling the upward trend in housing prices. In Sincheon-dong, part of the Jamsil area, an 84.79㎡ apartment in Parkrio was traded for 1.85 billion KRW on the 29th of last month, the highest amount ever recorded. In Dogok-dong, adjacent to Daechi-dong, a 114㎡ apartment in Dogok Rexle was sold for 3.1 billion KRW on the 26th of last month, 150 million KRW higher than the previous record of 2.95 billion KRW.
The balloon effect was not limited to the Gangnam area. In non-Gangnam areas, a so-called 'reverse balloon effect' is emerging. An 84.94㎡ apartment in Hanwha Dream Green, Gongdeok-dong, Mapo-gu, was traded at a record high of 1.175 billion KRW on the 26th of last month. In areas with many apartments priced under 900 million KRW such as 'Nodogang (Nowon, Dobong, Gangbuk districts)' and 'Geumgwan-gu (Geumcheon, Gwanak, Guro districts)', housing prices are also rising sharply. A 58.01㎡ apartment in Sangye Jugong Complex 1, Sangye-dong, Nowon-gu, was sold for 520 million KRW on the 26th of last month, marking the first time this complex was traded above 500 million KRW. An 89.46㎡ apartment in Hanshin Apartment, Geumcheon-gu, also closed at a record high transaction of 600 million KRW (12th floor) on the 20th of last month.
Yang Ji-young, head of R&C Research Institute, explained, "Liquidity is abundant but supply is tight, so despite the government's strong measures, expectations for rising housing prices remain."
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