Opening of the Yongsan Era... Real Estate Market Also Foresees Major Shift

On the 9th, one day before the presidential inauguration, the Seoul Yongsan Ministry of National Defense building, which will be used as the presidential office, is shown. President-elect Yoon Seok-yeol is scheduled to begin work on the 10th at the office relocated to the Yongsan Ministry of National Defense building. Photo by Transition Committee Press Corps

Is the ‘Yongsan Era’ coming to the real estate market? Yongsan housing prices are rapidly rising. The relocation of the presidential office to Yongsan has opened the floodgates for a massive development project that had been slow to gain momentum, and urban renewal projects are also gaining traction, raising expectations of a transformation on the scale of a “complete overhaul.” Some even predict that the real estate landscape of Seoul itself will undergo a tectonic shift.

Yongsan has always had various development advantages, including housing redevelopment, transportation, and office facilities, but progress has been slow. There is a significant disparity in urban scenery between some developed areas and others where development has lagged. To quickly shed its outdated image, rapid urban redevelopment is essential, and the presidential office relocation is expected to be a catalyst more certain than anything else. Centered around the presidential office and Yongsan Park, plans include the international business district to the left, the Hannam area redevelopment to the right, and a Han River waterfront project below.

The impact of the opening of the Yongsan Era is clearly reflected in the local real estate market. According to the Korea Real Estate Board, apartment prices in Yongsan rose by 0.04% in the first week of this month. Apartment prices in Yongsan had been declining for six consecutive weeks until just before the announcement of the presidential office relocation but turned upward by 0.01% in the fourth week of March, with the rate of increase expanding since then. An 87.54㎡ unit in Hangang Mansion, Ichon-dong, Yongsan-gu, was traded for 3.33 billion KRW (3rd floor) on the 21st of last month, a sharp increase of 830 million KRW compared to the previous transaction of 2.5 billion KRW (5th floor) in March last year. This complex, which received project approval in September last year and selected GS Construction as the contractor, is a representative redevelopment complex along the Han River. The price of a 123.12㎡ unit in Yongsan Park Xi, Hangang-ro 1-ga, surpassed 2 billion KRW (16th floor) for the first time on the 6th of last month. A unit of 84.21㎡ in Yongsan e-Pyeonhansesang, Singye-dong, was sold for 2.1 billion KRW (10th floor) on the 1st of last month, setting a new record price.

The Yongsan office and commercial real estate market is also stirring. According to a recent survey conducted by real estate data specialist RSquare among about 1,000 real estate managers of domestic companies, 58.6% said the ‘Yongsan Era is positive for commercial districts.’ Among them, 30.8% expected that ‘an increase in foot traffic will help revitalize commercial areas,’ and 24.6% anticipated ‘additional occupancy by government and administrative agencies.’ Furthermore, 21.5% expected a ‘premium from being the location of the presidential office,’ and 12.3% looked forward to ‘the possibility of large-scale development projects.’

The Yongsan Era is expected to affect not only Yongsan but the entire real estate landscape of Seoul. Areas around Cheongwadae such as Samcheong-dong and Seochon are expected to see an influx of tourists. The representative of real estate agency A in Samcheong-dong said, “There are many positive factors to expect, including increased tourists due to the opening of Cheongwadae and the construction of the Lee Kun-hee Museum, which will revitalize commercial districts,” adding, “Inquiries about rentals have also greatly increased.” There are also forecasts that Mapo-gu will be spotlighted as a key office and residential area supporting Yongsan, which has emerged as the ‘political number one district.’