[Initial Insight] Why 'Hambajip' Exists Only in Gangnam and Not in Gangbuk

"Gangnam residents always request that hambajip be set up. They dislike seeing construction workers covered in dust wandering around the neighborhood looking for restaurants." A construction company employee I met recently said that hambajip is essential at apartment construction sites in Gangnam. Hambajip refers to restaurants where construction workers eat, but unlike in Gangnam, people in Gangbuk actually oppose construction companies setting up hambajip on site. This is because workers in Gangbuk often become regular customers by purchasing meal tickets at nearby restaurants.

Stories like those about hambajip abound in the construction industry. A few years ago, a major construction company built a luxury brand apartment model house in the heart of Gangnam. This company operated the model house on the first and second floors along with another model house for apartments to be built in Gyeonggi Province. Later, residents preparing to move into the new Gangnam apartments flocked there. They demanded that the rooms for the Gyeonggi Province apartments be removed, saying, "Sharing the model house with the Gyeonggi apartments lowers the status of our apartment."

The fundamental cause of such incidents is the polarization of the real estate market divided into 'Gangnam and other regions.' Recently, this polarization has become even more severe. According to the Apartment Sales Price Index change rate (year-on-year) announced by the Korea Real Estate Board in May, the Gangnam 3 districts (Seocho-gu 1.2%, Gangnam-gu 2.0%, Songpa-gu 4.0%) and Mayongseong (Mapo-gu 1.9%, Yongsan-gu 2.4%, Seongdong-gu 3.2%) showed clear upward trends. In contrast, Nodogang (Nowon-gu -0.7%, Dobong-gu -0.6%, Gangbuk-gu -0.4%) actually declined. Apartment prices in the provinces, which hold 80% of the country's total 72,000 unsold apartments, continue to fall with no bottom in sight.

Given this situation, people with the ability to invest billions of won flock to Gangnam in search of a 'smart single property.' This phenomenon has appeared since the second half of 2017 during the Moon Jae-in administration. At that time, as the government increased real estate taxes and regulated bank loans, more people abandoned multi-homeowner status and chose to become single-homeowners. This trend included not only Seoul residents but also people from the provinces.

Since then, supply shortages have fueled the trend of housing price polarization. Seoul, where demand is high, faces even greater supply shortages. This was anticipated when the previous government blocked reconstruction and redevelopment in downtown Seoul. For the past three years, construction costs have also surged, delaying planned projects. Supply shortages raise concerns about rising housing prices and encourage the mentality of 'buy before prices go up further,' increasing demand for newly built apartments. Real estate experts say, "Apartments in Gangbuk are traded mainly as low-priced listings, while newly built apartments in the Gangnam 3 districts are traded based on asking prices."

If the government cannot immediately increase supply sufficiently, it should at least avoid stimulating the market. Industry insiders analyze that the government’s move to abolish the comprehensive real estate tax for single-homeowners has driven up demand for 'smart single properties.' If the tax exemption threshold rises to apartments priced in the high 2 billion won range, the concentration of demand for high-priced apartments in the Gangnam 3 districts will inevitably worsen.

While punitive taxation needs reform, timing is as important as content in policy. At a time when polarization is worsening, real estate policies that only raise apartment prices in specific areas of Seoul need to be readjusted. As seen in the cases of hambajip and model houses, incidents more dramatic than dramas can cause social division and conflict even greater than the housing price gap.