No New Apartments... Gangbuk and Dobong Have 3.6 Times Less Than Seocho [Real Estate AtoZ]

Seocho Sale Price 77.46 Million KRW per 3.3㎡
Gangbuk and Dobong 21.8 Million KRW

Seocho Has 2,574 Newly Built Units Within 5 Years
Gangbuk and Dobong Have No New Complexes

View of an apartment complex in Seoul city.
Photo by Yonhap News

The polarization of housing prices within Seoul is causing a widening gap in apartment prices by region. Seocho-gu has the highest apartment sale price per 3.3㎡, which is about 3.6 times higher than Gangbuk and Dobong-gu, where prices are the lowest. It is analyzed that areas like Gangbuk and Dobong-gu have no newly built complexes, further widening the price gap compared to other regions in Seoul.

No Newly Built Complexes in Gangbuk and Dobong-gu

According to real estate information company Real Estate R114 on the 28th, as of this month (data collected until the 18th), the region with the highest apartment sale price per 3.3㎡ in Seoul is Seocho-gu (77.46 million KRW). The lowest prices were in Gangbuk and Dobong-gu, both at 21.8 million KRW. This is a 3.6 times difference compared to Seocho-gu. The average apartment sale price per 3.3㎡ across all of Seoul is 41.23 million KRW.

Applying this price to the "national standard size" (supply area 114㎡, exclusive area 84㎡), the price difference between Seocho-gu and Gangbuk/Dobong-gu apartments exceeds 1.9 billion KRW. The price of a national standard size apartment in Seocho-gu is about 2.67589 billion KRW, while in Gangbuk and Dobong-gu it is 753.09 million KRW.

The gap between the two sides has grown larger than last year. While the apartment sale price per 3.3㎡ in Seocho-gu increased compared to a year ago, it decreased in Gangbuk and Dobong-gu. The price per 3.3㎡ in Seocho-gu was 74.89 million KRW last October, rising by 2.57 million KRW over the year. In contrast, prices in Gangbuk (22.25 million KRW) and Dobong-gu (21.84 million KRW) fell compared to a year ago.

Experts analyze that the lack of newly built complexes (within 5 years of occupancy) in areas like Gangbuk and Dobong-gu is the cause of this polarization. Yoon Ji-hae, research team leader at Real Estate R114, said, "The more new apartments there are, the higher the average housing price rises." He explained, "The price per 3.3㎡ of apartments in Seocho-gu ranges between 70 to 80 million KRW, but new apartments exceed 100 million KRW per 3.3㎡. Thanks to the new construction effect, even if there is a large supply, housing prices can still rise."

As of last month, Gangbuk and Dobong-gu had no such newly built complexes at all. Dobong-gu also lacks semi-new complexes (within 6 to 10 years of occupancy). Gangbuk-gu has a total of 524 semi-new apartment units. In contrast, Seocho-gu has 2,574 new apartment units and 5,059 semi-new units.

There is also a temperature difference in the subscription market by region. According to the Korea Real Estate Board's subscription homepage, among 26 apartment pre-sale cases in Seoul this year, Seocho-gu had the most with 4 cases. Meanwhile, there were no pre-sale complexes in Gangbuk and Dobong-gu.

"If Reconstruction Does Not Proceed, the Gap Will Widen Further"

Experts predict that this polarization will intensify further. Kim In-man, director of Kim In-man Real Estate Economic Research Institute, said, "The way to supply new apartments in Seoul is through redevelopment and reconstruction projects, but such projects are difficult in Gangbuk and Dobong-gu." He added, "These areas generally have lower income levels than Gangnam, so residents find it hard to pay the required contributions, which slows down the projects."

He said, "In reconstruction, construction costs are the same whether in Seocho-gu or Gangbuk/Dobong-gu. The problem is that even if the contribution amount is the same, it is much lower than the existing house price in Seocho-gu, but in Gangbuk and Dobong-gu, it is comparable to the house price."

There are also criticisms that redevelopment projects in Gangbuk and Dobong-gu are less viable compared to Seocho-gu, making it difficult to produce new apartments. Hwang Han-sol, research analyst at Economy Manrep, said, "Unlike Seocho-gu, even if residents pay contributions and proceed with reconstruction projects in Gangbuk and Dobong-gu, it is hard to expect profits due to relatively low housing prices."

Meanwhile, the regions with the highest apartment sale prices per 3.3㎡ in Seoul after Seocho-gu were Gangnam-gu (74.25 million KRW) and Songpa-gu (57.54 million KRW). These areas have 10,798 and 2,568 new apartment units respectively. Following Gangbuk and Dobong-gu in the lowest price ranking were Geumcheon-gu (22.05 million KRW) and Jungnang-gu (24.34 million KRW). These regions also have no apartments within 5 years of occupancy.