76㎡ transaction at 2.335 billion KRW... Highest price since July last year
Homeowners withdrawing listings amid reconstruction expectations
House prices likely to rise further after association establishment in speculative overheated zone
As the Eunma Apartment in Daechi-dong, Gangnam-gu, Seoul?known as the symbol of Gangnam reconstruction?approaches the establishment of its union 20 years after the approval of the promotion committee, various real estate indicators are rapidly changing. With rising expectations for reconstruction, homeowners are withdrawing their listings, while buyers waiting to catch the last train for the right to move in are gathering, causing house prices to rebound by 400 million to 600 million KRW compared to the recession period.
According to the Ministry of Land, Infrastructure and Transport's real transaction price disclosure system on the 12th, a 76㎡ unit in Eunma Apartment changed hands for 2.335 billion KRW on the 5th. This is the highest actual transaction price in 14 months since July 2022 (2.48 billion KRW). During the real estate downturn last November, prices had fallen to 1.77 billion KRW (1st floor), so this marks an increase of over 400 million KRW in 10 months.
The 84㎡ units also signed contracts at 2.72 billion KRW last month, marking the highest price in 21 months since November 2021 (2.82 billion KRW). The price for this area had dropped to 2.1 billion KRW in October last year.
The V-shaped rebound in Eunma Apartment prices appears to be influenced by the revival of the market due to real estate regulation easing and the growing expectations for reconstruction recently.
Eunma Apartment held its union establishment general meeting on the 19th of last month and recently submitted the union establishment application to Gangnam-gu Office. As the long-awaited reconstruction becomes tangible, homeowners are withdrawing their listings or raising asking prices. According to Apartment Real Transaction Price (Asil), a real estate big data company, the number of Eunma Apartment sale listings decreased by more than 30, from 204 on the day of the general meeting to 171 currently.
Moreover, since Gangnam-gu remains a speculative overheated district, buyers eager for the representative reconstruction in the top private education area are becoming impatient, causing actual transaction prices to rise significantly. In speculative overheated districts, only homeowners who have held their property for 10 years and resided for 5 years can sell their move-in rights upon union establishment, sharply reducing the number of tradable units.
A representative from a real estate agency in Daechi-dong, A Office, explained, "With asking prices rising sharply ahead of the union establishment, buyers waiting to catch the last train for move-in rights are mainly trading urgent sales that must be sold because transfer is not allowed after union establishment." Eunma Apartment, which is close to union establishment, currently ranks first in Gangnam-gu for the most transactions in the second half of the year (June 1 to September 11). Asking prices for Eunma Apartment are likely to rise further after union establishment. The representative added, "Homeowners who are not in a hurry are currently asking for 2.9 to 3 billion KRW, which is higher than the all-time high."
Meanwhile, Eunma Apartment is embroiled in a legal battle ahead of union establishment. Lee Jae-sung, the representative of the Eunma Owners' Association, filed an injunction to suspend the execution of duties against Choi Jeong-hee, the promotion committee chairperson elected as the union head. Lee claims, "From the appointment of election committee members to the pre-mail voting box, everything was managed defenselessly without observers, undermining the fairness of the election." The promotion committee maintains that there were no issues during the election process.
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