Exclusive 222.7㎡ at Raemian Prestige Changed Hands for 8.4 Billion KRW Last Month
Surpasses Apgujeong-dong Hyundai 1st Complex's Highest Price of 8 Billion KRW
Benefits from Balloon Effect Avoiding Land Transaction Permission Zone
High Proportion of New Complexes Reduces Buyer Burden
Panoramic view of Banpo Raemian Prestige Apartment in Banpo-dong, Seocho-gu, Seoul (Photo by Asia Economy DB)
[Asia Economy Reporter Ryu Tae-min] Although the housing market slump continues, apartment record-high price streaks are ongoing in Seocho-gu. This is due to the concentrated demand for a “smart single property” in the Seocho-gu area, which avoided designation as a land transaction permission zone. In particular, in Banpo-dong, an 8.4 billion KRW apartment has appeared, surpassing the highest price of the Apgujeong reconstruction complex.
According to the Ministry of Land, Infrastructure and Transport’s Real Transaction Price Disclosure System on the 18th, the 222.7㎡ (exclusive area) apartment in “Raemian Prestige” in Banpo-dong, Seocho-gu, was traded for 8.4 billion KRW on the 21st of last month, setting a new record high. The previous highest price of this apartment was 8 billion KRW at the end of March, meaning it rose by 400 million KRW in four months. This price surpasses the record high of 8 billion KRW set in January for the 196.2㎡ Hyundai 1st Complex in Apgujeong-dong, Gangnam-gu, Seoul, which leads apartment prices in the Gangnam area.
Recently, apartment prices in Seocho-gu have risen sharply, creating a competitive dynamic with Gangnam-gu for the “No.1 in Gangnam area” position, drawing significant attention. According to the Korea Real Estate Board, apartment sale prices in Seocho-gu have maintained an upward or stable trend this year, increasing by a cumulative 0.69%. In contrast, Gangnam-gu has experienced a decline for six consecutive weeks recently, resulting in only a 0.26% increase this year.
In fact, record-high prices are emerging one after another in Banpo. The 244.5㎡ Banpo Xi was traded for 7.5 billion KRW in March, setting a new record high. The 129.9㎡ Acro River Park was also sold for 6.8 billion KRW in May, jumping 500 million KRW in just two months from the previous highest price.
The continued upward trend in the Seocho-gu area is interpreted as benefiting from the regulatory balloon effect. In June, the designation of “land transaction permission zones” was extended for one more year in areas including Samseong-dong, Cheongdam-dong, and Daechi-dong in Gangnam-gu, as well as Jamsil-dong in Songpa-gu. As a result, residential land can only be purchased for actual residence purposes, and resale or leasing is prohibited for two years after purchase, increasing the burden on buyers. This means that these areas have been subject to transaction regulations for three years since 2020, leading to demand concentrating in nearby areas free from such regulations.
The two districts also show differences in the proportion of new complexes. Unlike Gangnam, where reconstruction complexes are concentrated, Seocho-gu has many newly built complexes where reconstruction has been completed. This raises jeonse (long-term lease) prices, which in turn drives up sale prices. This is why record-high prices are frequently appearing in Seocho-gu. According to Zigbang, the proportion of new complexes with less than five years since move-in this year is 12.97% in Seocho-gu and 8.75% in Gangnam-gu.
Recent sluggishness in the easing of reconstruction project regulations has also had an impact. Yoon Soo-min, a real estate specialist at NH Nonghyup Bank, explained, “Seocho-gu has many new complexes, making actual residence easier and maintaining high jeonse prices,” adding, “Due to consecutive interest rate hikes, investment returns on Gangnam area reconstruction complexes have deteriorated, causing demand to slow down.”
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