Apgujeong Hyundai Surpasses 8 Billion Won... Is the '100 Billion Won Apartment Era' Coming?

Ownership Change of 7th Phase 245.2㎡ at 8 Billion Won... Price Up 1.3 Billion in Half a Year
'Hannam The Hill' 243.2㎡ at Same Price... Battle for 'Nationwide No.1 Spot'
Investment Demand Concentrates... High-End Apartments Approaching '100 Billion Won Era'

Apgujeong Hyundai Apartment. Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Ryu Tae-min] Ahead of the Seoul mayoral by-election, the Apgujeong Hyundai Apartments, known as the ‘reconstruction leader,’ were sold for 8 billion KRW, setting a new record high. The price jumped by 1.3 billion KRW in just six months. In the market, there are even forecasts that the ‘100 billion KRW apartment era’ may be approaching, where the price of a single apartment matches that of a typical building, driven by reconstruction and redevelopment prospects.

According to the Ministry of Land, Infrastructure and Transport’s real transaction price disclosure system on the 7th, on the 5th, a 245.2㎡ (exclusive area) unit in Apgujeong Hyundai Apartments 7th complex changed hands for 8 billion KRW. The previous highest price for this apartment was 6.7 billion KRW in October last year, meaning it rose by 1.3 billion KRW in half a year.

This price matches the new record set in February when a 243.2㎡ unit in Hannam The Hill, located in Hannam-dong, Yongsan-gu, Seoul, which has maintained the highest price nationwide for apartments for seven years, was traded for 8 billion KRW. Recently, as the prices of large apartments in Apgujeong have surged significantly, a rivalry has formed over the ‘nationwide number one’ position, drawing considerable attention.

Preference for a Single Prime Property · Abundant Liquidity · Reconstruction Expectations Intertwined

The apartment prices in the Apgujeong area have been on a steep rise since the announcement of last year’s ‘June 17 Real Estate Measures,’ which stipulated that only residents who have lived for more than two years can receive new apartment move-in rights. Each complex hurried to obtain approval for the establishment of reconstruction associations to avoid this regulation, accelerating their projects, which acted as a positive factor. The Hyundai 7th complex apartment, which recently set the new record price, is also part of Apgujeong 3 District (Hyundai 1st to 7th, 10th, 13th, 14th complexes, and Daerim Villart) and is currently on the verge of receiving association establishment approval. Furthermore, with major candidates mentioning easing reconstruction regulations ahead of the Seoul mayoral by-election, expectations for accelerated reconstruction projects have increased, which seems to have influenced the market.

In fact, large apartments in Apgujeong have already surpassed 100 million KRW per pyeong (3.3㎡). A 196.21㎡ unit in Apgujeong 3 District Hyundai 1st complex, which is about to receive association establishment approval, was traded for 6.3 billion KRW on the 15th of last month, jumping 1.15 billion KRW from the previous highest price of 5.15 billion KRW the month before. The Shinhyundai 12th complex 182㎡ unit was also traded for 5.75 billion KRW in February, rising more than 1.2 billion KRW from the previous highest price of 4.5 billion KRW. A representative from Apgujeong-dong A Real Estate Agency said, “Recently, as the pace of reconstruction association establishment has picked up and expectations for reconstruction projects have grown, investors are flocking in. Many want to buy even at prices exceeding 100 million KRW per pyeong, but there are no listings available, so sales are limited.”

Experts believe that due to the Seoul mayoral election reflecting reconstruction expectations, prices are rising mainly in areas with reconstruction prospects and higher-tier locations, deepening polarization as the gap with lower-priced apartments widens.

Yeo Kyung-hee, Senior Researcher at Real Estate 114, explained, “Recently, the preference for a ‘single prime property’ has intensified, and with abundant liquidity, investment demand is concentrating on high-priced apartments. If reconstruction projects steadily progress as the market expects, price increases are likely to continue.”