"200 Million in One Month and 4x Increase in Trading Volume"... Signs of Rebound for Nowon Reconstruction Big Fish 'Mimisam'

Miryung, Miseong, Samho 3rd Phase: Largest Reconstruction Complex in Gangbuk Area
Expectations Rise with Safety Inspection Regulation Easing and Special Bogeumjari Loan
Some Say "Temporary Rebound Due to Quick Sale Absorption and Regulation Easing"

[Asia Economy Reporter Kwak Min-jae] The prices of aging apartments in the Nowon-gu area of Seoul, which were hit hard by interest rate hikes, are showing signs of rebound as they rose by nearly 200 million KRW in a month due to reconstruction expectations. During the same period, the transaction volume also surged about fourfold. However, some forecasts suggest that this is only a temporary rebound driven by reconstruction expectations, and it is difficult to see that housing purchase sentiment has entered a full recovery phase.

Apartment complex view in Nowon-gu, Seoul

According to the Ministry of Land, Infrastructure and Transport's real transaction price disclosure system on the 3rd, Samho 3rd Complex, one of the Wolgye Sihyeong Apartments in Wolgye-dong, Nowon-gu, Seoul, with an exclusive area of 59㎡, was traded for 690 million KRW on the 21st of last month. This is an increase of 42.5 million KRW compared to 647.5 million KRW on the 11th, just ten days earlier. It is also a sharp rise of 180 million KRW compared to the transaction price of 510 million KRW on December 15 of last year. The Wolgye Sihyeong Apartments, composed of Miryung, Miseong, and Samho 3rd Complex, collectively called ‘MimiSam,’ is the largest reconstruction complex in the Gangbuk area with 3,930 households and is considered the biggest beneficiary of the nearby Gwangwoon University station area development.

The transaction volume is also increasing rapidly. In December last year, the transaction volume in this complex was only three cases. However, in January this year, it increased nearly fourfold to 11 cases. After the government announced the easing of safety inspection regulations in December last year, lowering the structural stability weight from 50% to 30%, Wolgye Sihyeong immediately applied for a detailed safety inspection. Following the regulatory easing, as aging complexes in Mok-dong and Sinwol-dong passed safety inspections one after another, market interest is growing as the reconstruction project speed of Wolgye Sihyeong is expected to accelerate.

Additionally, the recently launched Special Home Loan (Teukrye Bogeumjari Loan) is another factor that is further increasing interest in Nowon reconstruction complexes. Using this product, loans can be obtained at a minimum interest rate in the 3% range for houses priced under 900 million KRW, with a maximum loan amount of up to 500 million KRW. This is significant because about 80% of the housing prices of older apartments in Nowon-gu are below 900 million KRW. According to a recent survey by Real Estate R114 on apartment prices, Nowon-gu had the highest proportion (81%) of apartments priced under 900 million KRW in Seoul.

However, experts advise caution, suggesting that the rebound may be temporary and speculative purchases should be avoided. Yeokyung Hee, Senior Researcher at Real Estate R114, said, "The easing of safety inspection regulations and the Special Home Loan seem to have contributed to increasing interest in reconstruction complexes in mid-to-low price areas like Nowon-gu. However, since this is likely a temporary rebound due to absorption of urgent sales and the effects of regulatory easing, it is necessary to consider the possibility that buying momentum may weaken after the urgent sales are exhausted."