'Dobong Soars Tens of Millions' 'Nowon Withdraws Listings'... Rising Trend in Nowon, Dobong, Gangbuk [Rising House Prices in These Areas]

As Prices Soar in Gangnam 3 Districts and Mayongsung, Demand Shifts to Relatively Less Expensive 'No, Do, Gang'

Rising Jeonse Prices Lead More People to Say "If This Continues, I'll Buy a House"
Urgent Sales Sold Out in June-July... Sale Prices Rise One Level

Seoul Dobong-gu Chang-dong Bukhansan I'Park Panorama

"On Tuesday the 13th, an exclusive 84㎡ (34 pyeong) unit sold for 940 million KRW. The previous actual transaction price was in the mid-800 million KRW range. Most transactions in June and July were centered around 'Gukpyeong' units. At that time, all the urgent sale listings were sold out and prices started to rise. The atmosphere here changed dramatically in just one month." (On the 16th, a licensed real estate agent in charge of Bukhansan I-Park 5th Complex in Chang-dong, Dobong-gu, Seoul)

Why did Nowon, Dobong, and Gangbuk start rising in August?

The apartment price surge that began in Gangnam and the Han River belt areas is spreading to the outskirts of Seoul. Since August, Nowon, Dobong, and Gangbuk (No-Do-Gang) have also started showing a clear upward trend. This is the first time in five months since March that apartment prices in the three Gangnam districts and Ma-Yong-Seong (Mapo, Yongsan, Seongdong) have risen without a single week off.

According to the Korea Real Estate Board on the 19th, apartment sale prices in No-Do-Gang rose by 0.12% to 0.19% compared to the previous week in the second week of August. Although this is still lower than the increase rates in the three Gangnam districts (0.46% to 0.58%) and Ma-Yong-Seong (0.36% to 0.63%), Nowon and Dobong districts showed the largest price increase since the real estate boom in October 2021, and Gangbuk district showed the largest increase since September 2018.

The number of apartment sale transactions in No-Do-Gang has noticeably increased since last month. According to the Seoul Real Estate Information Plaza, transactions in No-Do-Gang accounted for only 9.6% (718 out of 7,470 cases) of all Seoul transactions in June. In July, this rose to 12.6% (979 out of 7,720 cases). During this process, all urgent sale listings were exhausted, pushing prices up one level.

The soaring prices of apartment jeonse (long-term lease deposits) in Seoul have had an impact. Seoul apartment jeonse prices have been rising for 65 consecutive weeks. Kim Hyoseon, Senior Real Estate Specialist at NH Nonghyup, explained, "Due to the housing shortage issue in Seoul, prices had only risen in higher-end areas until last month," adding, "However, as jeonse prices rise sharply, there is now a growing demand to buy homes in mid- to low-priced areas."

Kim predicted, "No-Do-Gang had so many listings that it took some time for the low-priced listings to be absorbed, which delayed the timing of the price increase. The outskirts of Seoul will inevitably follow the upward trend." Ahead of the implementation of the second stage of the Debt Service Ratio (DSR) tightening next month, which will reduce bank loan limits, real buyers who want to "catch the last train" are looking for relatively less expensive areas within Seoul such as No-Do-Gang.

Gap investment inquiries... Prices expected to remain high if interest rates drop

Exterior view of Raemian Trivera 2nd Apartment in Mia-dong, Gangbuk-gu

The asking price for an exclusive 84㎡ unit at Raemian Tribera 2nd Complex in Mia-dong, Gangbuk-gu, has now risen to 950 million KRW. Until last month, there were units in the 800 million KRW range, but now none can be found. The actual transaction prices last month ranged from 850 million to 920 million KRW. A licensed real estate agent working at the shopping area of this complex said, "All urgent sale listings have been sold out, and from August, the price rise trend has officially started in this neighborhood." He added, "If one or two units in the mid-900 million KRW range sell, it is only a matter of time before prices approach the 1 billion KRW mark."

At Junggye Cheonggu Apartments, the flagship apartment in Nowon-gu, homeowners are seen withdrawing their listings. A resident met at a real estate office near Bank Intersection said, "I canceled my listing because I think house prices will rise further in the second half of the year and I want to wait." He added, "Since many people keep coming to buy houses these days, there seems to be no need to rush."

The current price for an exclusive 84㎡ unit in this complex is around 1.27 to 1.28 billion KRW. The licensed real estate agent in charge said, "In April alone, there were some listings in the 1.1 billion KRW range, but now asking prices have reached up to 1.3 billion KRW." He added, "Although the rise is not as rapid as in Gangnam or Ma-Yong-Seong, this area is steadily continuing to increase."

A view of Cheonggu Apartment in Junggye-dong, Nowon-gu

Gap investment inquiries have recently been coming in for Jugong Apartments near Nowon Station. A licensed real estate agent at Sanggye Jugong 7th Complex said, "Since the second half of the year, some people have come to look at properties for investment purposes, and some have actually proceeded with investments." He said, "Prices are now around 520 to 530 million KRW, which is several tens of millions higher than in the first half of the year," adding, "Recently, more people are coming to view houses, so sellers have the upper hand over buyers." He further explained, "The current jeonse price is 250 million KRW, which is about 50 million KRW higher than at the beginning of this year. Buyers are trying to purchase with jeonse, anticipating future price increases."

Looking at actual transaction prices of other apartments in the area also reveals an upward trend. On the 12th of this month, Changdong Sindobrenu 1st Complex in Chang-dong, Dobong-gu, set a new record high at 1.01 billion KRW for an exclusive 121㎡ unit. The previous highest price was 899 million KRW recorded in 2020.

Ham Young-jin, head of the Real Estate Research Lab at Woori Bank, said, "Although DSR will be tightened from September, there is anticipation of a US Federal Reserve (Fed) interest rate cut next month, and apartment jeonse prices continue to rise," adding, "While the volume of sales transactions may slightly decrease in the second half, the price rise trend in the outskirts of Seoul is expected to continue for the time being."