[Asia Economy Reporter Ryu Tae-min] This year, prices of newly built apartments in Seoul have fallen more than those of older complexes. This is interpreted as reflecting expectations for redevelopment projects following the next government's pledge to ease reconstruction regulations.
According to the weekly apartment price trend survey time series statistics by the Korea Real Estate Board on the 18th, apartment prices in Seoul that are over 20 years old have fallen by 0.10% (cumulative) since the beginning of this year. During the same period, prices of newly built apartments completed within the last 5 years dropped by 0.20%, twice as much. The price change rate of older apartments surpassed that of new apartments.
By region, prices of older apartments located in the southeastern area including Gangnam, Seocho, and Songpa rose by 0.12%, marking the only increase within Seoul. This was followed by the southwestern area including Mok-dong at -0.07%, northeastern area including Nowon-gu at -0.21%, central area at -0.26%, and northwestern area at -0.39%. In contrast, newly built apartments showed declines in all regions. The southeastern area fell by 0.04%, followed by the southwestern area at -0.07%, central area at -0.20%, northeastern area at -0.22%, and northwestern area at -0.68%.
Looking at the entire metropolitan area, the difference between new and old apartments is even more pronounced. In Gyeonggi Province, prices of newly built apartments under 5 years old fell by 1.40% this year, deepening the downward trend, while older complexes over 20 years old rose by 0.18%. In Incheon, newly built apartments dropped by 0.48% during the same period, whereas older apartments increased by 0.40%, showing contrasting trends.
It is interpreted that newly built apartments, which have already had high prices due to their high growth rates, have seen a price "leveling" phenomenon as buyers flock to relatively less expensive older apartments. According to an analysis of the Ministry of Land, Infrastructure and Transport's actual transaction price statistics by Zigbang, newly built apartments under 5 years old in Seoul have risen more than 30% annually for over 10 years since 2012 compared to general apartments. Especially in 2020 and 2021, when housing prices soared, they rose 40% and 42% higher respectively.
On the other hand, for complexes over 30 years old, the price gap with general apartments has continuously weakened since it recorded 18% in 2017, falling to 1% in 2020. Ham Young-jin, head of Zigbang Big Data Lab, said, "Due to previous government policies aimed at stabilizing the reconstruction market such as the reconstruction excess profit recovery system, restrictions on transfer of association member status, and strengthened safety inspections, the growth rate of older complexes has been low." He added, "It is worth watching whether the next government, which has pledged to ease reconstruction regulations, will reflect reconstruction expectations in older apartments again, forming higher prices."
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