[Report] Apgujeong Reconstruction Complex, Both Buyers and Sellers Show Increased Optimism

"Purchase inquiries 2 to 3 times higher than before"
Homeowners raise asking prices and withdraw listings

On the afternoon of the 5th, the area around the reconstruction complex in Apgujeong-dong, Gangnam-gu, Seoul was visited. Nearby real estate agents explained the changed atmosphere by saying, "Purchase inquiries have increased compared to before." Photo by Hwang Seoyul

[Asia Economy Reporter Hwang Seoyul] "After the presidential election ended, inquiries from buyers willing to pay a premium to make a deal have definitely increased." (Representative of A Real Estate Agency in Apgujeong-dong, Gangnam-gu, Seoul)

On the afternoon of the 5th, I visited Apgujeong-dong, Gangnam-gu, Seoul. A local real estate official said, "There are hardly any new listings these days, but inquiries from buyers have increased two to three times." The Apgujeong-dong area is home to many apartment complexes over 30 years old, reflecting expectations for reconstruction. According to Seoul City's Comprehensive Maintenance Project Information, there are six districts undergoing reconstruction projects in this area. Among them, five districts are at the stage of approval for the establishment of the association, and the remaining one is at the stage of approval for the promotion committee, which is still in the early stages of the project.

The market atmosphere has changed significantly before and after the presidential election, which is a common voice among real estate officials. Previously, even if there were inquiries from buyers, the movements were mostly passive, as if testing the waters, but recently, there have been many buyers who say they will "definitely buy."

Both buyers and sellers expressed optimism about the reconstruction in Apgujeong-dong, but some reacted that transactions might not be active due to the strict requirements for transferring membership status in this area. Photo by Hwang Seoyul

As the market atmosphere flows this way, homeowners are withdrawing listings or raising asking prices. This phenomenon is common in Gangnam areas with many reconstruction complexes, including Apgujeong-dong. According to statistics from the real estate big data company Asil (as of that day), compared to the presidential election day (March 9), the total listings in Apgujeong-dong decreased by 10.5%. During the same period, Daechi-dong and Gaepo-dong in Gangnam-gu showed decreases of 30% and 21.1%, respectively. The overall listing decrease rate in Gangnam-gu was 12.7%.

The asking price for a 183.41㎡ unit in Shinhyundai 11th complex in Apgujeong-dong is currently in the 7 billion KRW range, having risen by more than 1 billion KRW over the past month. Previously, an apartment of the same size in this complex was directly traded for 5.95 billion KRW on the 17th of last month. The previous actual transaction price was 5 billion KRW in January 2021, which means it increased by about 950 million KRW.

However, some argue that it is difficult to expect active transactions in this area going forward. This is because it is a land transaction permission zone and the conditions for transferring association member status in reconstruction projects are strict. The representative of C Real Estate said, "This area has strict residency conditions, so even with expectations, it may be difficult for transactions to occur easily."