‘The Top 1% Real Estate Called the Chanel Bag’ Right Here

- News of billion-won housing transactions frequently heard... Scarcity of luxury homes will eventually drive prices up
- 'Lucia Dosan 208' located on Dosan-daero sees smooth sales progress

Despite the government's strong regulations, ultra-high-end real estate transactions are active in representative affluent areas such as Gangnam and Hannam in Seoul. In particular, even celebrities who prefer monthly rent due to high taxes have recently been purchasing ultra-high-end properties, drawing attention.

According to the Ministry of Land, Infrastructure and Transport's actual transaction prices, a 233㎡ unit in Hannam The Hill, Hannam-dong, Yongsan-gu, Seoul, was traded for 7.75 billion KRW last month. This is over 600 million KRW higher than the 7.1 billion KRW transaction in December last year, marking the highest price ever recorded for this type. A 200㎡ unit in Acro Seoul Forest, Seongsu-dong 1-ga, Seongdong-gu, also set a new record by being traded for 6 billion KRW in May. Compared to the 2017 sale price (3.4 to 3.7 billion KRW range), it has risen by more than 2 billion KRW.

Purchases of ultra-high-end homes by famous celebrities are also active. Singer and actor IU purchased a unit in Eterno Cheongdam, Cheongdam-dong, Gangnam-gu, for 13 billion KRW in February. BTS members RM and Jimin also made cash transactions for Nine One Hannam in Hannam-dong, paying 6.36 billion KRW and 5.9 billion KRW respectively, attracting attention.

Experts attribute the recent record-breaking prices of ultra-high-end homes worth tens of billions of won and the active purchases by celebrities to the accumulated preference for owning a single, well-chosen property, which has increased demand for ultra-high-end homes.

Additionally, there is an analysis that the psychology similar to the recent trend of ‘Shatech (Chanel bag investment)’?believing that even if bought at a high price, the value will increase over time?also plays a role. During periods of rapid asset price increases like now, ultra-high-end real estate that can hedge against inflation is attractive to wealthy individuals.

Due to price regulations on Gangnam apartments, differentiation in finishing materials is impossible, which seems to increase the scarcity value of previously supplied high-end homes on Dosan-daero. In fact, an apartment recently supplied in Gangnam was provided with finishing materials similar to those of public apartments in Gyeonggi Province to meet the construction cost ceiling.

Real Estate Info research team leader Kwon Il said, “In the case of ultra-high-end homes, prices can increase by hundreds of millions of won within a few months, so wealthy individuals and celebrities who had conservatively invested in bank deposits or bonds are flocking to ultra-high-end homes where asset parking is possible. In this atmosphere, many asset holders are also switching to homes with higher value compared to their existing assets.”

[Lucia Dosan 208 Perspective View]

Luxury housing supply is also progressing smoothly. ‘Lucia Dosan 208,’ located on Dosan-daero, known as an affluent area in Gangnam, offers urban lifestyle housing (41~43㎡, 55 units) priced at up to 1.5 billion KRW, which sold out quickly, and some officetel units (52~60㎡, 37 units) are currently available. The new Wirye Sinsa Line Eulji Hospital Station is planned right next to Lucia Dosan 208, raising expectations for a ‘super station area’ premium. The interior layout, with the living room, dining room, and kitchen (LDK) arranged in a long, continuous space with a width of 9 meters, also draws attention. Construction is handled by DL Construction (formerly Daelim Construction).

A sales representative said, “We have strived to provide the best living space that satisfies the top 1% through the use of premium imported materials throughout the interior, differentiated floor plans, and concierge services,” adding, “Inquiries from VVIPs have been nonstop.”