85 Transactions Over 5 Billion KRW from January to May... Twice the Previous Year
6 Cases Over 10 Billion KRW Including Hannam The Hill and Nine One Hannam
Transactions of ultra-luxury apartments priced over 5 billion KRW in Seoul have surged. This is the result of cash-rich individuals, whose asset values have increased amid prolonged high interest rates, shopping for ultra-luxury apartments. The stabilization of prices in the ultra-luxury apartment market due to the real estate market downturn is also analyzed to have encouraged purchases by these cash-rich buyers.
Ultra-luxury apartments over 5 billion KRW are in high demand
According to the Ministry of Land, Infrastructure and Transport's Real Transaction Price Disclosure System on the 4th, the number of apartment transactions in Seoul priced over 5 billion KRW from January to May this year totaled 85 cases based on contract dates (excluding cancellations), more than double compared to 41 cases in the same period last year. Among these, there were as many as 6 transactions in the 10 billion KRW range.
The areas with many ultra-luxury transactions are well-known affluent neighborhoods. There were many transactions in Hannam-dong, Yongsan-gu; Apgujeong-dong, Gangnam-gu; Banpo-dong, Seocho-gu; and Seongsu-dong 1-ga, Seongdong-gu. Among these, a 244㎡ unit in 'Nine One Hannam' located in Hannam-dong was traded for 12 billion KRW in April. This is the highest price among ultra-luxury transactions this year. It is estimated that this apartment was sold by the couple Jang Yoon-jung and Do Kyung-wan. A 240㎡ unit in 'Hannam The Hill' in the same area was also traded for 12 billion KRW around the same time. Next, the 245㎡ unit in 'Hyundai 7th' in Apgujeong-dong, sold for 11.5 billion KRW in March, ranked high among ultra-high transactions. The 200㎡ unit in 'Acro Seoul Forest' in Seongsu-dong 1-ga changed ownership last month for 10.9 billion KRW.
There were 7 transactions in the 9 billion KRW range. In the cases of Hannam The Hill, Nine One Hannam, and Acro Seoul Forest, slightly smaller units were traded compared to the 10 billion KRW transactions. The 175㎡ unit in 'I-Park' in Samseong-dong, Gangnam-gu, was traded for 9 billion KRW. Additionally, a 196㎡ unit in 'Hyundai 1st' in Apgujeong-dong was sold for 8.9 billion KRW, and a 222㎡ unit in 'Raemian Prestige' in Banpo-dong was sold for 8.28 billion KRW, each welcoming new owners.
Ultra-luxury transactions driven more by listings than the market
Between January and May last year, there was only one transaction in the 10 billion KRW range: a 240㎡ unit in Hannam The Hill. However, this year, the number of transactions increased from March. Kim Eun-seon, head of the Zigbang Big Data Lab, said, "Ultra-luxury apartments are relatively less sensitive to the market, and the timing of when listings appear is important. Penthouse units sometimes come up only once every few years, so prices can jump significantly in rare transactions." She added, "If asset owners judge that there are no available listings in such prime locations, they seize the opportunity when it arises."
In fact, a 268㎡ unit in 'Park Hannam' in Hannam-dong was traded for 18 billion KRW in August last year, after being sold for 13.5 billion KRW in April 2022, showing a large time gap. This apartment holds the record for the highest transaction price ever for an apartment in Seoul. There are also hidden strong performers. Originally supplied as private rental housing, a 248㎡ unit in 'Brighton N40' in Nonhyeon-dong, Gangnam-gu, was traded for 12.2555 billion KRW within a year as of April. This apartment became famous after it was revealed that broadcaster Yoo Jae-suk purchased it. There have been three transactions over 10 billion KRW in one year. Among the traded units, the smallest 209㎡ unit changed hands for 10.615 billion KRW.
The price increase for ultra-luxury apartments is expected to grow further. Although the market cannot be said to have fully recovered, prices have started to stir in some areas since April. Ham Young-jin, head of the Real Estate Research Lab at Woori Bank, said, "With inflation, prices are leveling up, reducing the proportion of low-priced housing transactions and increasing high-priced housing transactions. As signs of economic cycle improvement appear, transactions considering supply scarcity are increasing, which will deepen market polarization."
The sales prices in areas where ultra-luxury apartments are concentrated have also recently risen. According to statistics from the Korea Real Estate Board, Seoul apartment prices have risen for 10 consecutive weeks, with cumulative increases mainly in autonomous districts where ultra-luxury apartments are concentrated, such as Seongdong-gu (0.67%) and Yongsan-gu (0.59%). Kim Kyu-jung, head of the Asset Management Succession Research Institute at Korea Investment & Securities, said, "Although the adjustment trend continuing since the end of last year affected the beginning of this year, compared to late 2022 to early last year, the recovery has been somewhat faster, which may have influenced ultra-luxury housing transactions. However, ultra-luxury housing transactions have very strong individual characteristics, so factors such as comprehensive real estate tax, liquidity for inheritance and gifts, and tax systems likely also played a significant role in transactions."
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