80.95% of Apartment Complexes Sold in No·Do·Gang Areas This Month Traded Below Previous Actual Transaction Prices
Clear Price Decline in Both Old and New Buildings... Drop of 305 Million KRW in 5 Months
Weekly Sales Index Change Rate Increasing... Last Week, Nowon-gu -0.88%
[Asia Economy Reporter Hwang Seoyul] This month, 8 out of 10 apartments in No·Do·Gang (Nowon, Dobong, Gangbuk districts) were sold at prices lower than the previous actual transaction prices. Some places have seen prices drop by more than 300 million KRW in just five months. As the transaction freeze intensifies, sales are mainly happening through urgent sales, causing the decline to deepen day by day.
According to the Ministry of Land, Infrastructure and Transport's actual transaction price disclosure system on the 28th, among 21 apartments sold through brokerage transactions in Nowon, Dobong, and Gangbuk districts this month, 17 were sold at prices lower than the previous transactions. In terms of proportion, 80.95% of the apartments sold this month had actual transaction prices lower than the previous transactions.
Since No·Do·Gang has many older buildings, price declines were particularly noticeable in buildings over 15 years old. The ‘Hagye 1 Cheonggu’ apartment in Hagye-dong, Nowon-gu, completed in June 1997 (84.6㎡ exclusive area, 4th floor), was sold for 710 million KRW this month. This is 305 million KRW lower than the same size unit (6th floor) sold in June for 1.015 billion KRW. The ‘Junggye Green 1st Complex’ in Junggye-dong, Nowon-gu, completed in 1990 (39.87㎡ exclusive area, 9th floor), was traded for 480 million KRW. The previous transaction (11th floor) was 595 million KRW in April.
The ‘Changdong Jugong 3rd Complex’ in Chang-dong, Dobong-gu, completed in 1990 (49.94㎡, 4th floor), was also sold for 550 million KRW. The previous transaction in June was 720 million KRW (12th floor), and a lower floor unit (2nd floor) was sold for 754 million KRW in April.
New constructions are not much different. The ‘Dream Forest SK View’ in Wolgye-dong, Nowon-gu, completed in 2016 (84.93㎡ exclusive area, 12th floor), was sold for 800 million KRW, which is 300 million KRW lower than the previous transaction of the same size and floor (September last year, 1.1 billion KRW). The ‘Forena Nowon’ in Sanggye-dong, Nowon-gu, completed in 2020 (59.94㎡, 28th floor), was brokered for 770 million KRW. This is also 230 million KRW less than the same size unit (12th floor, 1 billion KRW) traded in August last year.
Compared to last year, transactions have completely frozen, but as sales are mainly through urgent sales, the sale prices continue to decline steadily. According to the Seoul Real Estate Information Plaza, the total number of apartment sales transactions in No·Do·Gang in September last year was 342, but it decreased to 70 in September this year, a 79.2% drop compared to the same month last year.
Looking at the Korea Real Estate Agency’s sales price index, the weekly index change rates for the three districts have mostly been negative this year. Last week, the weekly index change rates for Nowon, Dobong, and Gangbuk districts were -0.88%, -0.83%, and -0.74%, respectively. In particular, the decline is growing day by day. In the first week of July, the decline rates were only in the second decimal place at -0.08%, -0.06%, and -0.08%, but since then, they expanded to the first decimal place, and last week the decline widened further, approaching minus 1.
Park Hapsu, an adjunct professor at Konkuk University Graduate School of Real Estate, explained, "In a continuing weak market, although last week’s decline was a baby step, the base interest rate keeps rising, and only some urgent sales are happening, causing prices in No·Do·Gang complexes to fall further. Given the increased interest burden, and the fact that these areas have seen a significant influx of people in their 20s and 30s, the conditions have inevitably become more burdensome."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
