April Sales Volume Surpasses 200 Units for the First Time in 1 Year and 7 Months
Demand Gathers Fueled by Special Loan Amid Sharp House Price Drop
"Rising Offers Likely to Hold as Young Buyers Chase"
The number of apartment transactions in Nowon-gu, Seoul, once a hotspot for '2030 young buyers going all-in,' has surpassed 200 for the first time in 1 year and 7 months, with housing prices rising for four consecutive weeks. This area saw concentrated buying demand from young people during the real estate boom, but recently experienced a sharp drop in housing prices due to steep interest rate hikes. As cautious bottoming theories about Seoul's housing prices emerge and special mortgage loans are introduced, analysts suggest that Nowon-gu is attracting demand for mid-to-low priced homes.
According to the Seoul Real Estate Information Plaza on the 19th, the number of apartment sales transactions in Nowon-gu in April was recorded at 208. This is the first time in 19 months since September 2021 (212 transactions) that Nowon-gu's transaction volume has reached the 200 mark. Due to the real estate market slump, transactions fell to as low as 30 in September last year but recovered to over 100 in January this year and exceeded 200 in April. Since there are still about two weeks left for actual transaction registrations, the transaction volume is expected to increase further.
Nowon-gu was an area where housing prices surged rapidly as the 2030 generation focused on buying mid-to-low priced apartments during the previous real estate boom. From 2020 to 2021, the apartment price increase rate was 11.43%, significantly outpacing the Seoul average increase rate of 7.13% during the same period. However, with the interest rate hike rally starting last year, the real estate downturn hit, causing housing prices to plummet. The speed of decline was as fast as the rapid rise. In the third week of December last year, when the market was frozen, the decline rate was 1.34%, the highest among Seoul's 25 districts.
The recent revival of buying demand in Nowon-gu is due to the comprehensive deregulation through the 1·3 measures, which has cautiously raised hopes of a bottoming out in Seoul's housing prices. Moreover, Nowon-gu is the biggest beneficiary of the special mortgage loan program targeting apartments priced under 900 million KRW. According to Real Estate R114, the proportion of apartments priced under 900 million KRW in Nowon-gu is 81%, the highest in Seoul. A representative from a real estate agency in Junggye-dong explained, "Nowon-gu was a place where 2030 young buyers went all-in, so many homeowners could not bear the interest burden during the high-interest period, resulting in a larger price drop. As prices fell sharply in a short period, demand for bargain properties increased."
As demand stirs, prices are also recovering. The apartment sale prices in Nowon-gu have been rising for four consecutive weeks from the fourth week of April, reversing a decline after 1 year and 4 months, continuing through the third week of May. In fact, rebound transactions are increasingly occurring mainly in mid-to-low priced older apartments in Junggye and Hagye-dong. For example, an 84.6㎡ unit in Hagye 1st Cheonggu was contracted for sale at 830 million KRW on the 2nd, up 75 million KRW from the previous transaction of 755 million KRW in February. Similarly, an 84.7㎡ unit in Junggye-dong Cheonggu 3rd was traded at 1.063 billion KRW on the 29th of last month, rising more than 140 million KRW from the February actual transaction price of 920 million KRW.
Ye Gyeong-hee, senior researcher at Real Estate R114, said, "Nowon has many apartment complexes eligible for the special mortgage loan program under 900 million KRW and also benefits from eased reconstruction regulations in the early stages of redevelopment, leading to price increases as bargain properties are sold out. If young buyers continue to chase purchases, areas like Nowon, Dobong, and Gangseo, which are relatively accessible, are likely to maintain the increased asking prices," she predicted.
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