NH Investment & Securities Publishes In-Depth Analysis Report on Daechi School District Apartments

NH Investment & Securities announced on the 28th that it has published the report titled 'Daechi-dong In-depth Analysis_Daechi School District Apartment In-depth Analysis.'

The report reviews the current status and market of apartment complexes in Daechi-dong and includes future prospects through analysis of reconstruction and land transaction permit zone issues as well as school districts. The Daechi school district refers to the area encompassing southern Daechi-dong along Teheran-ro, including the Daechi-dong academy district and nearby major schools in Yeoksam 2-dong and Dogok 2-dong. It is a highly preferred residential area representing Gangnam. As a business district (GBD) and a region with close proximity between residence and workplace, it maintains high residential demand based on the strengths of its school districts and infrastructure. Daechi-dong, the center of the Daechi school district, rapidly transformed after the Yeongdong 2nd District land readjustment project in the 1970s, and especially after the appearance of Eunma Apartments, large-scale complexes such as Gaepo Useong, Hanbo Mido, and Seonkyung Apartments began to be located there in the 1980s.

The apartment sale prices in Daechi-dong, Dogok-dong, and Yeoksam-dong showed an increasing trend starting from the first half of last year. As of January this year, the actual transaction price in Daechi-dong recorded 83.34 million KRW per 3.3㎡, rising to about 109% compared to the previous peak in June 2022. Dogok-dong and Yeoksam-dong also showed an upward trend, reaching a peak in November last year, followed by a slight decline recently. The transaction volume reached 199 cases in July last year, marking the highest volume in the past three years, but then sharply dropped to 26 cases in January this year due to rising market interest rates and rapid price increases.

Major reconstruction complexes include Eunma, Mido, Useong 1st, Ssangyong 2nd, and Ssangyong 1st in Daechi-dong, and Gaepo Hanshin and Gaepo Useong 4th in Dogok-dong. Except for Daechi Mido, all have entered the stage after the approval of the establishment of the association. Reconstruction is progressing mainly for medium to large-sized units, and recently, as the project speed has increased, prices have risen and new highs have been recorded.

Additionally, with Daechi-dong being removed from the land transaction permit zone last month, the possibility of inflow of external demand has increased. Accordingly, it is analyzed that transaction prices and volume will rise, strengthening the price support line for apartments in the Gangnam area. In fact, after the removal from the land transaction permit zone, a 84㎡ unit of Raemian Daechi Palace was reported as sold at the highest transaction price of 4 billion KRW.

Jeong Bohyun, Real Estate Research Fellow at NH Investment & Securities Tax Center (NH WM Masters Specialist), stated, "The effect of the land transaction permit zone removal in Jamsil, Samsung, Daechi, and Cheongdam (Jamsamdaecheong) leading to a rise in the price support line and increased downward rigidity of apartments in the Gangnam area is expected to continue for some time. Daechi-dong will continue to be directly influenced by this trend, but major reconstruction sites are still designated as land transaction permit zones and speculative overheating district regulations remain, so the momentum may be limited."

Jung Yuna, Senior Real Estate Researcher at NH Investment & Securities, analyzed, "Considering that medium to large-sized units and large complexes are mainly undergoing reconstruction in Daechi-dong, reconstruction expectations and project speed are judged to be the long-term key factors determining Daechi-dong apartment prices and external inflow demand."