Apartment Prices in Gangnam 3 Districts and Mayongsung Rise to the "Tip of the Head"... Transactions Decline [Real Estate AtoZ]

Apartment Prices in Gangnam 3 Districts at 95-102% of Previous Highs
Apartment Prices in Mayongseong at 95-100% of Previous Highs
Transaction Share in Gangnam 3 Districts and Mayongseong Declines Amid Sharp Price Rise
Apartment Sales Share Rises in NodoGang and Geumgwan Districts

Apartment transaction volumes in Seoul's Gangnam 3 districts (Gangnam, Seocho, Songpa) and the 'Mayongseong' area (Mapo, Yongsan, Seongdong), which have recently been identified as major regions for rising housing prices, have decreased. The proportion of transactions these areas account for in the overall Seoul apartment market has also declined. Analysts suggest that soaring prices, including record highs, have dampened buyer sentiment. On the other hand, buyer interest has relatively shifted to the 'Nodogang' area (Nowon, Dobong, Gangbuk), which had been somewhat excluded from the housing price surge. This indicates that the previously concentrated price increases in key areas are spreading across Seoul.

Apartment Transactions Decline in Gangnam 3 Districts and Mayongseong Amid Rising Housing Prices

According to the Seoul Real Estate Information Plaza on the 19th, as of the 16th, apartment transactions in the Gangnam 3 districts last month totaled 1,337, down from 1,498 the previous month. This marks a decline after an increase in apartment transactions since March. Mayongseong apartments showed a similar trend, with 866 transactions last month, down from 1,014 in June.

The share of these areas in Seoul's total apartment transactions also decreased. The Gangnam 3 districts' transaction share fell by 2.7 percentage points from 20.0% in the previous month to 17.3% last month. Mayongseong's share dropped from 13.6% in June to 11.2% last month.

The decline in apartment transactions in the Gangnam 3 districts and Mayongseong is attributed to significant price increases in these areas. Kim Je-kyung, director of Toomi Real Estate Consulting, said, "Apartment prices in the Gangnam 3 districts and Mayongseong have already surged significantly over the past three to four months," adding, "This has likely made it difficult to purchase apartments in these areas, leading to a decrease in transactions."

According to real estate information company Real Estate R114, as of the 9th, the average apartment prices in the Gangnam 3 districts have risen to 95-102% of their 2021-2022 peak levels. Gangnam (102%) and Seocho (101%) districts have surpassed their previous highs, while Songpa stands at about 95%.

Mayongseong apartments have also recovered to 95-100% of their previous peak prices. Yongsan (100%) has returned to its previous high, and Mapo (95%) and Seongdong (96%) apartment prices are approaching recovery.

According to the Ministry of Land, Infrastructure and Transport's real transaction price disclosure system, an 84㎡ unit in 'Raemian Daechi Palace' located in Daechi-dong, Gangnam-gu, recorded a new high price of 3.4 billion KRW in May. The previous peak was 3.3 billion KRW in April 2022. On the 4th, this apartment sold for 3.6 billion KRW. An 84㎡ unit in 'Prestige Xi' in Yeomni-dong, Mapo-gu, sold for 1.965 billion KRW in June, surpassing the previous high of 1.95 billion KRW recorded in September 2022. On the 2nd, it was traded at 2.185 billion KRW, pushing prices even higher.

Shift Toward More Affordable 'Nodogang' and 'Geumgwan-gu' Apartments... "Seoul's Consideration of Land Transaction Permission Zones in Gangnam 3 Districts and Yongsan Could Redirect Interest Back to Gangnam 3 and Mayongseong"

According to the Seoul Real Estate Information Plaza, apartment transactions in Seoul reached 7,470 in June. This is a steady increase from 4,400 transactions in March, surpassing 7,000 for the first time in 42 months. This upward trend continued, with transactions rising to 7,720 last month.

While overall apartment transactions in Seoul have increased, the decline in transactions in the Gangnam 3 districts and Mayongseong is due to increased activity in other parts of Seoul. Apartment transactions in the relatively affordable Nodogang area have been rising since March, reaching 979 last month. The Geumgwan-gu area (Geumcheon, Gwanak, Guro) also saw increased transactions, with 578 last month.

The share of Nodogang in Seoul's total apartment transactions rose from 9.6% to 12.7%. Geumgwan-gu's share increased from 7.2% to 7.5% during the same period.

Real estate analyst Kwon Young-sun from Shinhan Bank said, "As apartment prices rise mainly in the Gangnam 3 districts and Mayongseong, buying interest seems to be spreading across all areas of Seoul," adding, "Although the transaction share in Gangnam 3 and Mayongseong has decreased, it does not necessarily mean an absolute decline in transaction volume."

Apartment complex in downtown Seoul.
[Photo by Yonhap News]

Regarding this, Director Kim said, "With recent sharp price increases in the Gangnam 3 districts and Mayongseong, buyers may have shifted their demand to more affordable areas." Apartment prices in Nodogang remain at about 85-87% of their previous peaks, while Geumgwan-gu stands at 85-91%, indicating prices have not surged significantly yet.

However, he noted, "Seoul City is currently considering designating the Gangnam 3 districts and Yongsan-gu as land transaction permission zones, which could lead to an increase in transaction shares in Gangnam 3 and Mayongseong in the future." Before these areas are officially designated as permission zones, there may be a temporary surge in sales demand. Furthermore, if these areas become permission zones, Mapo-gu and Seongdong-gu could attract more attention, potentially increasing apartment sales demand there as well, he explained.