Sangji Ritzville Kyleum 210㎡·Bill Polaris 166㎡ Record High
Seoul Apartments Over 135㎡ by Korea Real Estate Board Rise for 5 Consecutive Weeks
"Impact of Large Apartment Supply Shortage and Loan Regulation Easing"
As apartment prices in Seoul continue to rise daily, record-high transactions of large-sized apartments in Seoul are ongoing. This is attributed to the scarcity of supply itself, the steady interest of real demand buyers who prefer a 'smart single property,' and the fact that loans for houses exceeding 1.5 billion KRW became available at the end of last year, increasing the number of buyers.
Cases of large apartments in Seoul being traded at record high prices are emerging one after another. The photo shows the Tower Palace in Dogok-dong, Seoul. [Image source=Yonhap News]
According to the Ministry of Land, Infrastructure and Transport's real transaction price disclosure system on the 25th, a 210㎡ apartment in Sangji Ritzville Kyleum, Dogok-dong, Gangnam-gu, was traded for 6.5 billion KRW (6th floor) on the 8th of last month, setting a new record price. This is about 400 million KRW more expensive than the 6.1 billion KRW (2nd floor) recorded in March last year. The 164㎡ apartment in Tower Palace 1st, Dogok-dong, was sold for 4.9 billion KRW (30th floor) on the 16th of last month, which is 550 million KRW higher than the 4.35 billion KRW (10th floor) recorded in February last year. The 166㎡ apartment in Bill Polaris, Cheongdam-dong, Gangnam-gu, was contracted for 5.7 billion KRW (11th floor) in May this year, 535 million KRW higher than the 5.165 billion KRW (17th floor) recorded in November two years ago. The 170㎡ apartment in Shinhyundai 12th, Apgujeong-dong, Gangnam-gu, was traded at a record price of 5.4 billion KRW (3rd floor) in April, which is 900 million KRW more expensive than the 4.5 billion KRW (2nd floor) recorded two years ago in February.
Outside Gangnam, record-high prices for ultra-large apartments (exclusive area over 135㎡) are also continuing. A 140㎡ apartment in Trimage, Seongsu-dong 1-ga, Seongdong-gu, was traded last month for 4.78 billion KRW (36th floor), 190 million KRW higher than the previous high price. A 205㎡ apartment in SK Leaders View Namsan, Hoehyeon-dong 1-ga, Jung-gu, was traded for 2.7 billion KRW (14th floor) on the 15th of last month, with the previous high being 2.375 billion KRW (11th floor) sold in March last year.
The upward trend in prices of ultra-large apartments in Seoul can also be confirmed through statistics. According to the Korea Real Estate Board, apartments in Seoul with an exclusive area over 135㎡ rose by 0.03% in the third week of June (as of the 19th) compared to the previous week. This continued a five-week consecutive rise following a 0.07% increase in the fourth week of May (as of the 22nd).
This is because the supply of large apartments itself is absolutely insufficient. According to an analysis by Realtoday of the Korea Real Estate Board's subscription home data, among the total 160,143 general apartment supply units last year, only 1,741 units (about 1.1%) were over 135㎡ in exclusive area. In particular, in Seoul, although a total of 6,707 units were supplied last year, not a single unit over 135㎡ was supplied.
Moreover, the government's lifting of the loan ban on houses exceeding 1.5 billion KRW also appears to have influenced the strength of large apartments across Seoul. In December last year, the government allowed mortgage loans for houses exceeding 1.5 billion KRW and uniformly adjusted the loan-to-value ratio (LTV) to 50%. This enabled loans for large, high-priced houses in central Seoul, which were previously exclusive to cash-rich buyers, thereby increasing the number of buyers and leading to record-high cases.
Kyunghee Yeo, Senior Researcher at Real Estate R114, analyzed, “Even in Seoul, the supply of ultra-high-priced large apartments is limited, and with recent stabilization of interest rates and loan availability, waiting real demand buyers have started purchasing. In particular, it seems that real demand buyers are attempting to trade up to larger units within the same complex or in higher-tier areas including Gangnam in Seoul.”
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