First Sale Over 1 Billion KRW in Nowon-gu Sanggye Jugong
Hannam The Hill Sets New Record with 7.7 Billion KRW Sale, Highest This Year
Lease Market Uncertainty Amid Transaction Freeze Spurs Demand for Smart Single Homes
[Asia Economy Reporter Onyu Lim] Despite the transaction freeze, record-high apartment sales continue across Seoul, undermining the government's assessment that 'housing prices have stabilized.' In Nowon-gu, a mid-sized Jugong apartment recorded its first sale exceeding 1 billion KRW, and in Hannam-dong, Yongsan-gu, Hannam The Hill was sold for around 7.7 billion KRW, setting a new record for the highest apartment sale this year.
According to the Ministry of Land, Infrastructure and Transport's real transaction price disclosure system on the 12th, a 79㎡ (exclusive area) unit in Jugong Complex 7 in Sanggye-dong, Nowon-gu, was sold for 1.045 billion KRW on the 16th of last month. This is the first time that the sale price of a Jugong apartment, a representative mid-to-low price apartment cluster in Nowon-gu, has exceeded 1 billion KRW. This complex, completed in 1988, had a real transaction price of only 765 million KRW as of January this year, but amid the '30s panic buying' frenzy, it surpassed 900 million KRW in July and then broke through the 1 billion KRW mark.
Outside Nowon-gu, record-high transactions continue in the outskirts of Seoul. A 59㎡ unit in Dream Forest Harrington Place in Mia-dong, Gangbuk-gu, was sold for a record 805 million KRW on the 22nd of last month. Compared to 700 million KRW in February, this represents a 105 million KRW increase in seven months. An 84㎡ unit in Hanyang 7th Complex in Ssangmun-dong, Dobong-gu, was sold for 570 million KRW on the 16th of last month, 120 million KRW higher than the previous record of 450 million KRW. A 114㎡ unit in Doosan, Bongcheon-dong, Gwanak-gu, was sold for a record 1.16 billion KRW on the 9th of last month, and a 101㎡ unit in Lotte Castle Gold Park Phase 1 in Doksan-dong, Geumcheon-gu, was sold for 1.24 billion KRW on the 3rd of last month, also setting new records.
These record-high transactions are notable as they occurred amid a sharp contraction in housing transactions following the government's June 17 and July 10 real estate measures. The number of apartment transactions in Seoul in September was 2,575 (as of the 12th), shrinking to about 16% of the 15,588 transactions recorded in June, the highest this year. The government is currently assessing that "panic buying has subsided and the upward trend in housing prices has stopped."
This phenomenon is analyzed as a result of the unstable jeonse (long-term lease) market stimulating the sales market. After the implementation of the new Housing Lease Protection Act, which includes the right to request contract renewal and caps on rent increases, tenants, feeling anxious due to the shortage of jeonse listings and soaring prices, have started purchasing homes, leading to rising sales prices. Myungsook Ahn, head of the Real Estate Investment Support Center at Woori Bank, said, "Recently, Seoul housing prices have been in a wait-and-see mode, but it does not appear to be a major downward trend. Mid-to-low price apartments in the outskirts are seeing sales demand due to the sharp rise in jeonse prices, so prices are not falling, and record-high prices continue to be set."
Record-high prices for high-end homes also continue. A 243.642㎡ unit in Hannam The Hill, Hannam-dong, Yongsan-gu, a representative ultra-high-end apartment, was confirmed to have been sold for 7.75 billion KRW in early last month. This is the highest price recorded nationwide for apartments this year. The previous highest price in this complex was 7.3 billion KRW for a 240.35㎡ unit last month. An 84㎡ unit in Eunma Apartment, Daechi-dong, Gangnam-gu, also changed hands for 2.38 billion KRW on August 28, setting a new record high. Hapsu Park, senior real estate specialist at KB Kookmin Bank, explained, "Rather than investors, actual buyers are focusing on a smart single home that meets their residential selection criteria and demand, resulting in a tendency to pay a little more to purchase such a property."
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