"Mayongseong First Buy" Area Faces 'Panic Buying' [Seoul Housing Prices Where To]①

Now Perceived as 'Cheapest'... Buying Momentum Increases
September Stress DSR Level 2 Also Introduced
Mapo Raemian Prugio Exclusive 84㎡ 1.625 Billion KRW → 1.92 Billion KRW
Jamsil Resence Exclusive 84㎡, 2.225 Billion KRW → 2.6 Billion KRW

"People trying to move to Mapo from other neighborhoods are 'pre-buying' before even selling their current homes.
Since loan limit regulations will tighten from autumn, making it harder to buy a house, they think 'let's just buy first.'
Those who pre-buy believe that even if they put their current homes on a quick sale, the future profits from living in Mapo will be substantial.
Just three months ago, there were quite a few low-priced quick-sale properties, but with recent increased transactions, those have now dried up.
The actual transaction prices have risen by about 300 million KRW in just four months."
(Representative of a real estate agency near Raemian Prugio Apartment, Ahyeon-dong, Mapo-gu, on the 16th)

Reasons Behind the 'Panic Buying' of Seoul Apartments

A 'panic buying' phenomenon is emerging in some Seoul apartment sales markets. Starting this year, the volume of move-in units began to decrease, and the permitting indicators that predict supply volumes 2-3 years ahead have plummeted to the bottom, leading real demand buyers to perceive 'now is the cheapest'?a sentiment reappearing for the first time in three years since 2021. As apartment jeonse (long-term lease) prices soared, many tenants decided, "I'd rather buy than continue renting," turning jeonse demand into purchase demand, which also contributed to rising home prices. In this context, with bank loan limits set to decrease from September and expectations of interest rate cuts in the second half of this year spreading, anxiety that 'if you don't buy now, you won't be able to' is stimulating real demand buyers.

The price rise that began in February this year in the Gangnam 3 districts (Gangnam, Seocho, Songpa) has spread to 'Mayongsung' (Mapo, Yongsan, Seongdong districts). There are specific reasons why only these areas are rising within Seoul. In Gangnam, to avoid heavy taxation, many multi-homeowners have given up their status and concentrated demand on owning a 'smart single home.'

The rise in Mayongsung stems from a preference for 'newly built apartments.' Park Wongab, Senior Real Estate Specialist at KB Kookmin Bank, explained, "Most transactions are led by new apartments," adding, "People in their 30s and 40s account for 50-60% of total transactions, and they are the 'Eoljuksin (frozen to death but prefer new builds)' generation." He added, "Seongdong-gu and Mapo-gu are rising particularly because they have many new apartments," and "transactions are centered on real demand buyers who want to live close to their workplaces."

Mayongsung's Transaction Volume Growth Surpasses Gangnam 3 Districts

According to the Seoul Metropolitan Government's Real Estate Information Plaza on the 18th, the total apartment transaction volume in the Mayongsung area in the first half of this year (January to June) was 3,034 cases. This is a 61.6% increase compared to the second half of last year (1,877 cases). During the same period, apartment transactions in the Gangnam 3 districts increased by 43.1% (3,101 cases → 4,438 cases), meaning Mayongsung surpassed them. In particular, Mapo-gu's apartment transactions in the first half reached 1,232 cases, a 70.6% rise from 722 cases in the second half of last year.

The 84㎡ unit in Raemian Prugio 2nd Complex, Ahyeon-dong, Mapo-gu, which Asia Economy visited, was traded for 1.92 billion KRW on the 15th of last month (based on the Ministry of Land, Infrastructure and Transport's actual transaction price disclosure system). This is about 300 million KRW higher than the price on February 24th (1.625 billion KRW). The asking price has risen to 1.95 billion KRW.

A real estate agent near this complex said, "As loan limits decrease and expectations for interest rate cuts grow, buyers are moving faster," adding, "Many inquiries come from people trying to buy while they can still borrow even one won more before the stress Debt Service Ratio (DSR) regulation tightens in September." The stress DSR imposes a certain additional interest rate on borrowers with variable-rate loans, effectively reducing loan limits.

A buyer visiting the Mapo Raemian Prugio real estate office said, "It's time to catch the last train for loans before the limits shrink," adding, "Mortgage loan interest rates are at their lowest this year, and the Bank of Korea said it will soon cut the base rate, so apartment prices in this neighborhood seem likely to rise further."

Meanwhile, a representative of a real estate agency near the Centras complex in Seongdong-gu, Seoul, explained, "Unlike the Gangnam 3 districts where apartment prices exceed 2 billion KRW, Mayongsung apartments can be bought in the 1 billion KRW range," adding, "Demand that cannot go to Gangnam is instead coming to newly built apartments in Mayongsung."

Gangnam Also on a Rising Trend... "Almost No Quick Sales"

The 'Resentz' complex located in Jamsil-dong, Songpa-gu, Seoul.
Photo by Seungwook Park

Gangnam house prices have also been on a steady rise this year. According to the weekly Seoul apartment price change rate (compared to the previous week) by the Korea Real Estate Board, the earliest area in Seoul to start rising was Songpa-gu, which turned upward from February. From March, the Gangnam 3 districts and Mayongsung also began to rise. The week 2 price change rates in July for these areas ranged from 0.28% to 0.52%.

The 84㎡ unit in Resence, Jamsil-dong, Songpa-gu, was traded for 2.6 billion KRW on the 8th of last month. It was sold for 2.225 billion KRW on January 5th this year, rising by 375 million KRW in the meantime. The asking price is around 2.7 billion KRW. A real estate agent near the complex said, "There are almost no quick-sale properties in Resence these days," adding, "There is one quick-sale property now, but it is because the owner urgently had to be hospitalized. Other than such cases, it's hard to find quick-sale properties these days."

A buyer who visited a brokerage office to check listings said, "Since Seoul apartment supply is decreasing, prices will likely rise a lot within 3-4 years," adding, "I'm scared of missing the buying timing by just standing still."