"If You Can't Go to Jamsil, Just Go to Gangdong"... Weekend Commuting from Provinces as Prices Jump 200 Million Won [Unusual Housing Prices]

Apartment Prices Rise Centered on Newly Built Large Complexes After Toheoje Lifted

"After the Land Transaction Permission System (Toheoje) was lifted, a 34-pyeong (exclusive area 84㎡) apartment price rose by more than 200 million KRW in just one month."

On the 14th, a real estate agency representative in Godeok-dong, Gangdong-gu, Seoul, said, "There have been more inquiries about transactions, and actual transactions seem to have doubled compared to usual." He explained, "Last Sunday, the office was crowded with customers, and there were also many people who came up from other provinces. There is a high demand to use this area as a stepping stone to move to Songpa or Gangnam."

◆"If you can't go to Jamsil, you go to Gangdong"= In Gangdong-gu, next to Jamsil, where the Land Transaction Permission System was lifted, housing prices have risen mainly around newly built large complexes. Another agent near Godeok Gracious, the flagship apartment in Gangdong-gu, said, "In Gangdong-gu, buyers who find Olympic Park Foretune's prices too high are turning to Gracious," adding, "Although not as much as Jamsil, Gangdong is also on an upward trend."

On this day, the Ministry of Land, Infrastructure and Transport and the Seoul city inspection team visited the neighborhood. They conducted on-site inspections due to the rapid rise in apartment prices after the lifting of the Toheoje. After inspecting Dunchon-dong on the 13th, they toured Godeok-dong on this day. Financial authorities also plan to closely analyze transaction trends in key areas including Gangdong-gu and monitor whether household loans are increasing.

The view of Godeok Gracious in Gangdong-gu, Seoul on the 14th. Photo by Choi Seoyoon

Actual transaction prices are rising. The 84㎡ exclusive area apartment in Godeok Gracious, Godeok-dong, Gangdong-gu, which was sold for 1.86 billion KRW (11th floor) in January, was sold for 2.4 billion KRW more at 2.1 billion KRW (12th floor) shortly after the Toheoje was lifted. For the 59㎡ (25-pyeong) unit, the price rose from 1.45 billion KRW on the 11th floor in January to 1.656 billion KRW about a week after the Toheoje was lifted, an increase of 156 million KRW. The 97㎡ exclusive area apartment on the 26th floor, sold for 2.38 billion KRW on the 24th of last month, was 200 million KRW higher than the 14th-floor transaction price of the same size two months ago (2.18 billion KRW).

As Godeok Gracious surged, surrounding apartments also saw their prices rise. A broker in Godeok-dong said, "As Gracious goes up, the asking prices of nearby newly built apartments are also rising," adding, "I don't know how long this will last, but currently, many listings are priced high and lined up."

Since the Toheoje was lifted, homeowners' attitudes have changed. He said, "Now sellers have taken the initiative," and "Owners of Godeok Arteon or Godeok Xi often withdraw their listings, saying prices might rise further." The 84㎡ exclusive area apartment on the 4th floor of Godeok Arteon, across from Godeok Gracious, was sold for 1.78 billion KRW on the 15th of last month. Just two months ago, a 9th-floor unit of the same size was sold for 1.67 billion KRW.

◆Government crackdown begins... Market reaction is cautious for now= However, with the government crackdown starting, a cautious standoff is underway. The rapid rise in asking prices over a short period has led to a wait-and-see mood.

A broker in this area said, "Prices in Godeok-dong gradually rose from the end of last year and ignited after the Toheoje was lifted," adding, "But from experience, apartment prices rarely rise for more than three months. After signing a contract, the balance is usually paid within three months, so it's hard to hold out longer." In reality, after three months, existing buyers focus on preparing the balance payment and find it difficult to make additional purchases, while new buyers hesitate to jump in due to the already high prices.

Some agencies are closing or refraining from transactions due to awareness of the government crackdown. He said, "When the government steps in, the market quiets down temporarily, but even if they crack down after prices have risen sufficiently, the practical effect is limited," expressing frustration that "government responses are always one step behind."

A flyer for sale and jeonse listings is posted at a real estate agency in Seoul.

◆Gwangjin-gu and Dongjak-gu also stir... Nodogang numbers rose but sentiment is still muted= Gwangjin-gu has also come under the influence of the Toheoje lifting. A real estate agency representative in Gwangjin-gu said, "Homeowners who expected prices to rise withdrew their listings," adding, "Transactions are not very active, but there are cases of actual price increases." A 59㎡ exclusive area apartment on the 17th floor of Gwangjang Hillstate in Gwangjang-dong, Gwangjin-gu, was sold for 1.674 billion KRW on the 26th of last month, and an 8th-floor unit of the same size was sold for 1.75 billion KRW on the 4th of this month, up 76 million KRW. The 84㎡ exclusive area unit on the 11th floor of e-Pyeonhansesang Gwangjin Grand Park in Guui-dong was sold for 1.8 billion KRW. Compared to the same size unit on the 6th floor sold for 1.63 billion KRW in January, it rose by 170 million KRW in two months.

Dongjak-gu, adjacent to Seocho-gu, is also stirring mainly around large complexes. The 84㎡ exclusive area unit on the 22nd floor of Doosan We've the Zenith 2nd in Sangdo-dong, Dongjak-gu, was sold for 1.45 billion KRW on the 20th of last month. This is 40 million KRW higher than the actual transaction price of the same size unit on the 21st floor a month earlier (1.41 billion KRW). The 84㎡ exclusive area unit on the 11th floor of Acro Riverheim in Heukseok-dong was sold for 2.42 billion KRW on the 25th of last month. This is 120 million KRW higher than the actual transaction price of the same size unit on the 13th floor in December last year (2.3 billion KRW), rising in two months.

Apartment prices in Nodogang (Nowon, Dobong, Gangbuk), which had been weak, are also moving. According to the apartment price change rate trend for the second week of this month compiled by the Korea Real Estate Board, Gangbuk (0.03%) and Dobong (0.01%) turned to an increase compared to the previous week, ending an 11-week decline. Nowon (-0.03% → 0.00%) shifted from a decline to stable.

However, no warmth was felt on the ground. A real estate agency representative near Banghak Samsung Raemian Apartments in Dobong-gu said, "There are no inquiries about gap investments (leasehold purchase), and actual resident demand is quiet," adding, "Not only large units but also small units are not selling well."