Seoul Landmark Apartment Prices Doubled During Current Government's 3 Years

[Asia Economy Reporter Yoo In-ho] The sale prices of landmark apartments in Seoul have nearly doubled on average over three years under the Moon Jae-in administration.

According to data submitted by the Ministry of Land, Infrastructure and Transport and the Korea Real Estate Board to Song Seok-jun, a member of the National Assembly Land, Infrastructure and Transport Committee from the People Power Party, the average sales price index in 25 districts of Seoul was 114.8 and the actual transaction price index was 150.4 in the third quarter of 2020 compared to the second quarter of 2017.

However, Song’s office independently investigated the reported actual transaction prices of landmark apartments in the 25 districts of Seoul and found that the actual transaction price increase rate was 106% in the third quarter of 2020 compared to the second quarter of 2017.

The criteria for selecting landmark apartments are apartment complexes completed before the second quarter of 2017 that have a large number of households, high preference, and active transactions.

For example, Banpo Acro River Park in Seocho-gu, Raemian Daechi Palace in Gangnam-gu, and Mapo Raemian Prugio in Mapo-gu.

This figure is more than seven times higher (7.16 times) than the sales price index increase rate (14.8 percentage points) and more than twice as high (2.1 times) as the actual transaction price index increase rate (50.4 percentage points).

The actual transaction price increase rates of apartments such as Jamsil Els in Jamsil-dong, Songpa-gu (121.7% increase), Geonyeong 3rd Complex in Junggye-dong, Nowon-gu (129.2% increase), Guui Hyundai 2nd Complex in Guui-dong, Gwangjin-gu (159.3% increase), Raemian Crecity in Jeonnong-dong, Dongdaemun-gu (131.7% increase), and e-Pyeonhansesang Sinchon in Bukahyeon-dong, Seodaemun-gu (128.6% increase) have been confirmed to exceed 120% under the current government.

Not only in Seoul but also in major apartments in Gyeonggi, Sejong, Gwangju, and Busan, the actual transaction prices rose significantly more than the sales price index and actual transaction price index. In Bundang-gu, Seongnam, Gyeonggi, the sales index was only 24.3 and the actual transaction index was 57.8, but the actual transaction price increase rate of Pangyo Prugio Granble in Baekhyeon-dong was confirmed to be 98.2%.

In Yeongtong-gu, Suwon, Gyeonggi, the sales index was only 31.3 and the actual transaction index was 34.5, but the actual transaction price increase rate of Jayeon & Hillstate in Iui-dong was investigated to be 120%. In Sejong City, the sales index was only 18.8 and the actual transaction index was 37.6, but the actual transaction price increase rate of Gajae Village 5th Complex Hyundai Emco Town in Jongchon-dong was confirmed to be 141.9%.

In Gwangju Metropolitan City, the sales index was only 3.8 and the actual transaction index was 17.9, but the actual transaction price increase rate of Posco The Sharp in Bongseon-dong, Nam-gu was confirmed to be 45.3%.

In Busan, the sales index was only -1.1 and the actual transaction index was 0.7, but the actual transaction price increase rate of The Sharp Centum Park 1st Complex in Jaesong-dong, Haeundae-gu was confirmed to be 64.1%.

Song said, "The public’s skepticism about the government’s lie that the real estate market is stable has now turned into anger. In reality, the house I want to live in has doubled in price over three years, but the government’s lie that prices have not risen much is no longer trusted, and people are engulfed in anxiety and feel they can no longer delay purchasing a home, leading even young people to engage in 'all-in panic buying.'"

He added, "Just as the Consumer Price Index has shortcomings in reflecting actual living costs and the Living Cost Index is compiled and announced as a supplementary indicator to grasp perceived inflation, the Ministry of Land and the Korea Real Estate Board need to develop indicators that reflect the actual real estate market situation considering public expectations and preferences."