"Apgujeong Apartment Price Jumps 200 Million Won in 4 Months, Expected to Reach 10 Billion Won... Reconstruction Accelerates [Practical Investment]"

Acceleration of Apgujeong 2nd District Reconstruction
Top-Tier Location Even in Gangnam
Competition Expected Among Hyundai E&C, Samsung C&T, and Others

As the reconstruction of Hyundai Apartments in Apgujeong-dong, the flagship apartment complex in Gangnam-gu, Seoul, gains momentum, its appeal as an investment destination is growing. Expectations that the redevelopment project will transform the area into the most luxurious residential district in Gangnam are already reflected in the prices. Some even predict that once reconstruction is complete, apartments around 30 pyeong (approximately 99 square meters) could approach 10 billion KRW.

According to the Ministry of Land, Infrastructure and Transport's real transaction price disclosure system on the 19th, last month, a 108㎡ unit in Shinhyundai 9th complex in Apgujeong-dong was traded at a record high of 5.25 billion KRW. Compared to the same-sized apartment which was sold for 4.9 to 5 billion KRW in October last year, the price rose by more than 200 million KRW in just four months. Nearby Shinhyundai 12th complex also set a new record. In November last year, celebrity Park Soo-hong attracted public attention by purchasing a 170㎡ unit in Shinhyundai 12th for 7.05 billion KRW. Not stopping there, three months later, the same-sized apartment was traded for 7.8 billion KRW, continuing the upward trend in record prices.

Apgujeong Hyundai Reconstruction Accelerates

Both complexes belong to Apgujeong 2nd District, where record-high transactions continue due to reconstruction expectations. Apgujeong 2nd District consists of Shinhyundai 9th, 11th, and 12th complexes, originally built in 1982 with a total of 27 buildings and 1,924 households. After reconstruction, it is planned to have 2,571 households with a maximum height of around 65 floors and a maximum height of 250 meters (with a floor area ratio below 300%). The total construction cost is expected to approach 2.4 trillion KRW.

Apgujeong 2nd District is considered one of the top-tier locations in Gangnam. It is near Apgujeong Station on Subway Line 3 and the Hyundai Overpass. Hangang Park and Apgujeong Hyundai Department Store are also within walking distance. The project is progressing faster compared to nearby complexes. Among the six districts scheduled for reconstruction, Apgujeong 2nd District is expected to break ground first. On the 13th, the Seoul City Gazette announced the 'Apgujeong 2nd District Reconstruction Maintenance Area and Maintenance Plan Decision.' The association plans to announce a bid for selecting a construction company in June and aims to complete the selection by September.

With the construction company selection just a few months away, construction firms are already actively courting association members. Recently, it has been rare to see construction companies competing for maintenance projects due to rising construction costs and economic downturns, but a competitive landscape is expected for this complex. Although high construction costs may secure profitability, companies can also benefit from strengthening the brand image of 'Gangnam-gu flagship apartment construction' after completion.

Hyundai Engineering & Construction has even applied for the trademark 'Apgujeong Hyundai.' It is reported that a dedicated team called the 'Apgujeong Reconstruction Sales Team' has been newly established. While Hyundai E&C has started its promotional campaign early, Samsung C&T is also preparing to join the competition. If Hyundai E&C and Samsung C&T both bid, it will be a rematch following the Hanam 4th District bidding battle that ended with Samsung C&T's victory in January. Additionally, GS Engineering & Construction may also participate in the Apgujeong bidding. GS E&C has already recorded over 2 trillion KRW in orders this year, including being selected as a joint contractor for the redevelopment project in Sangye 5 District, Nowon-gu.

While Apgujeong 2nd District is moving ahead, other districts are also accelerating their maintenance projects. Apgujeong 3rd District, the largest redevelopment project in Apgujeong with up to 70 floors and 5,175 households, recently disclosed its revised maintenance plan to residents. The 3rd District project combines Hyundai 1st to 7th, 10th, 13th, and 14th complexes. It is undergoing redevelopment to transform into a complex with up to 70 floors and 5,175 households. Recently, record-high transactions have also been occurring in the 3rd District. According to data from the real estate big data platform Asil, last month, a 196㎡ unit in Hyundai 1st and 2nd complexes was traded for 9.5 billion KRW, significantly surpassing the previous highest transaction price of 8.95 billion KRW.

Is the Era of 300 Million KRW per Pyeong Coming?

Some critics argue that the prices paid for Apgujeong apartments, amounts unimaginable for ordinary people, are excessively overvalued. However, experts advise that it is difficult to dismiss these prices as overvalued since Apgujeong is the most prestigious location in South Korea and house prices are expected to rise after reconstruction. Yoon Soo-min, a real estate specialist at NH Nonghyup Bank, explained, "Apgujeong has traditionally held a strong image as an affluent area, and this image is recognized as value by high-net-worth individuals. When determining value, both utility and scarcity play important roles. In a situation where polarization is increasing, transactions based on scarcity will continue to exist."

He also predicted that the value as an investment destination will persist after reconstruction. Yoon said, "Reconstruction is underway for about 10,000 households in Apgujeong, and demand for this area will remain strong, which is the power of a top-tier location. There are always people wanting to move to a higher-tier area, and we will likely see people selling their homes in Banpo and moving to Apgujeong."

Some speculate that since Raemian One Bailey in Banpo-dong, Seocho-gu, was traded at 200 million KRW per pyeong, transactions in Apgujeong could reach 300 million KRW per pyeong. Yoon Ji-hae, chief researcher at Real Estate R114, said, "It has always been a flagship area, and with the effect of new construction plus the premium of being near the Han River, 300 million KRW per pyeong is realistically possible. Existing residents have strong financial power, so supply is limited, but demand always exists, making price maintenance not difficult."

However, experts generally agree that the strong demand in Apgujeong is difficult to translate into increased reconstruction demand in the general Seoul market. Yoon added, "The reconstruction issues in Apgujeong and the general market are completely different stories. Due to Apgujeong's representativeness, construction companies are actively participating, but in other areas, they have to approach based on profitability, so the perspectives are entirely different."