Unwavering Buying Sentiment... More Flowing into 'Seoul New Constructions'?

The market demand is shifting towards new apartments following the government's '2·4 Supply Plan.'

According to the Korea Real Estate Board on the 16th, the apartment sales supply-demand index in the Seoul metropolitan area recorded 118.8 last week (as of the 8th), rising 0.6 points from the previous week (118.2). This is the highest figure since the Korea Real Estate Board began this survey in July 2012. Although the government announced a 'supply bomb' in major cities such as Seoul under the 2·4 Plan, the buying sentiment for apartments in the metropolitan area has actually strengthened.

In particular, after the 2·4 Plan, which includes a large-scale supply expansion of 830,000 households, demand is expanding towards newly built complexes. This is because the government announced that it would not grant priority occupancy rights to homebuyers after the announcement date as a measure to prevent speculation in public-led redevelopment and reconstruction projects. As uncertainty around redevelopment and reconstruction, which had been the top investment priority, has increased, interest in new apartments without such risks has relatively grown.

In fact, prices of new apartments in Seoul have shown a noticeable upward trend since the Lunar New Year holiday. The Acro River Park 84㎡ (exclusive area), which was transacted at around 3.3 billion KRW last month, saw its asking price soar to 3.9 billion KRW after the holiday. In the case of Mapo Prestige Xi 59㎡ in Yeomni-dong, Mapo-gu, Seoul, scheduled for move-in next month, the transaction price was 1.63 billion KRW at the end of last month, and the asking price reportedly rose to 1.7 billion KRW.

There is also analysis that the decrease in new move-in supply is influencing the strength of new apartment prices. According to Real Estate 114, the move-in volume in March is expected to be 19,800 households, which is more than 40% less than this month.

Seo Jin-hyung, president of the Korea Real Estate Society (professor at Gyeongin Women's University), forecasted, "For the time being, buying demand is likely to concentrate on newly built apartments in central Seoul, especially in the Gangnam 3 districts and the districts of Mapo, Yongsan, and Seongdong."