[Real Estate AtoZ] Autumn Breeze in 'Nodogang', Transaction Decline in 'Mayongseong'

Apartment Transaction Volume by Seoul Area
Nodogang 1,803 in Q2 → 2,006 in Q3
Gangnam 3 Districts 3,424 in Q2 → 2,673 in Q3
Mayongseong 2,247 in Q2 → 1,693 in Q3
"Nodogang, Relatively Affordable Prices"

Seoul apartment complex view. [Photo by Yonhap News]

In the third quarter of this year, the volume of apartment sales transactions in the 'Nodogang (Nowon, Dobong, Gangbuk districts)' area of Seoul increased compared to the previous quarter. This contrasts with popular areas such as the 'Gangnam 3 districts (Gangnam, Seocho, Songpa districts)' and 'Mayongseong (Mapo, Yongsan, Seongdong districts)', where transaction volumes, which had increased earlier this year, are now slowing down.

Nodogang Apartment Transactions: 1,803 in Q2 → 2,006 in Q3... Gangnam 3 Districts and Mayongseong See Decline in Transactions

According to the Seoul apartment transaction data from the Ministry of Land, Infrastructure and Transport's Real Transaction Price Disclosure System on the 23rd, the number of apartment transactions in the Nodogang area reached 2,006 in the third quarter of this year. Although the third quarter is not yet over, this figure has already surpassed the previous quarter's 1,803 transactions. The Q3 transaction volume is based on apartment sales contracts recorded from July through the 20th of this month.

The buying trend in Nodogang apartments differs from the overall apartment transaction volume across Seoul. The total apartment transactions in Seoul for Q3 were 15,219, falling short of the previous quarter's 17,300. During the same period, the Gangnam 3 districts dropped from 3,424 to 2,673 transactions, and Mayongseong decreased from 2,247 to 1,693 transactions.

The increase in apartment purchases in Nodogang is attributed to the relatively affordable housing prices in the area. According to the Korea Real Estate Board's 'National Housing Price Trend,' last month the apartment sales price index in this area ranged between 85.5 and 89.4. In contrast, the Gangnam 3 districts ranged from 105.6 to 109.9, and Mayongseong ranged from 99.7 to 104.5.

Nodogang has a high proportion of older apartments, which contributes to lower housing prices. According to the private real estate company Real Estate R114, as of the 20th, only 2.2% of the apartments in this area are complexes less than 10 years old. Out of a total of 174,687 households, 3,835 are in complexes under 10 years old. Apartments over 30 years old total 97,224 households, accounting for 55.6% of the total.

Seoul Housing Prices Take a Breather After Rising Centered on New Apartments in Gangnam 3 Districts and Mayongseong... Demand Rises in Nodogang

So far, housing prices in Seoul have risen mainly around new apartments. This upward trend has been concentrated in the Gangnam 3 districts and Mayongseong, where the proportion of new complexes is high. Among all complexes in the Gangnam 3 districts, 40,664 households (17.4%) are in complexes less than 10 years old, and Mayongseong has 24,969 households (22.9%). Across all of Seoul, complexes under 10 years old total 158,995 households, making up 14.3% of the total.

Accordingly, apartment prices in the Gangnam 3 districts rose by 4.05% to 6.89% from January to last month, and Mayongseong increased by 4.71% to 7.18% during the same period. In contrast, Nodogang's price increase was limited to between -0.04% and 0.84%.

Because Nodogang's housing price increases are smaller compared to the Gangnam 3 districts and Mayongseong, demand for apartment purchases is gathering there. While it is difficult to buy apartments in the Gangnam 3 districts and Mayongseong due to their significantly higher prices, Nodogang apartment prices have not yet entered a full-scale rise. Kim Je-kyung, director of Toomi Real Estate Consulting, said, "From a traditional perspective, it can be understood that housing prices in higher-tier areas like the Gangnam 3 districts and Mayongseong rise first, followed by the prices in lower-tier areas like Nodogang catching up. The areas that rose first are now taking a breather while the lower-tier areas' prices are moving."

However, Kim added, "These days, the real estate market is a stage where prices soar mainly in higher-tier areas. It is almost embarrassing to call the subsequent rise in lower-tier areas' prices after the higher-tier areas' price increase a so-called 'gap filling'." He noted, "The price increase in lower-tier areas like Nodogang is still relatively weak."