[Exclusive] Gangnam District Apartment Market Cap Surpasses 300 Trillion Won... Polarization Deepens as Outlying Seoul Areas Decline

Seoul Apartment Market Cap Rises by 59 Trillion Won...
Gangnam 3 Districts Account for 70% of the Increase
Gangnam Surpasses 300 Trillion, Dobong at 27 Trillion...
An 11-Fold Gap
Nodogang, Jungnang, Guro, and Geumcheon See Declines...
Polarization Deepens

The market capitalization of apartments in Gangnam District, Seoul, has surpassed 300 trillion won for the first time in history. Apartment market capitalization refers to the total sum of the sales prices of all apartments within a specific complex or region. In the Seoul apartment market, the so-called 'Hangang Belt'?led by the three Gangnam districts (Gangnam, Seocho, and Songpa)?has seen a marked increase in market capitalization, while outlying areas have experienced a decrease. This has led to a more pronounced polarization within Seoul's real estate market. Analysts point out that the polarization of income is further deepening the polarization of housing.

According to data titled "Apartment Sales Market Capitalization by District in Seoul" provided by Real Estate R114 on June 5, the total market capitalization for Seoul as of April was tallied at 1,689.4981 trillion won. Compared to 1,630.0176 trillion won in December of last year, this represents an increase of 3.64%?or 59.4805 trillion won?in just four months. Of this increase, the combined gain from the three Gangnam districts amounted to 42.0131 trillion won, accounting for 70.8% of the total rise.

During this period, Gangnam District's market capitalization rose from 286.7428 trillion won to 303.1334 trillion won, an increase of 16.3906 trillion won. This marks the first time since Real Estate R114 began compiling statistics that any Seoul district has reached the 300 trillion won threshold in apartment market capitalization. On a monthly average, the market capitalization increased by more than 4 trillion won. Songpa District also saw an increase from 200.5865 trillion won to 213.5176 trillion won, up 12.9311 trillion won, while Seocho District rose from 192.3291 trillion won to 205.0205 trillion won, up 12.6914 trillion won. In terms of growth rate, Seocho District (6.59%) ranked first in Seoul, followed by Songpa District (6.45%) and Gangnam District (5.72%). The share of the three Gangnam districts in Seoul's total apartment market capitalization also increased by 1 percentage point, from 41.7% to 42.7% during this period.

Following the three Gangnam districts, other areas adjacent to the Han River?such as Seongdong District (4.02%), Gangdong District (3.47%), Yongsan District (3.40%), and Mapo District (3.01%)?also ranked high in terms of market capitalization growth rate. All these areas are either adjacent to or include the Han River, collectively referred to as the "Hangang Belt." This demonstrates the strong influence of the location premium associated with proximity to the Han River. Next in line were Yangcheon District (2.98%), Dongjak District (2.95%), and Jongno District (2.77%), rounding out the top ten. Yangcheon, Dongjak, and Jongno districts share the common feature of being close to the Central Business District (CBD) or Yeouido Business District (YBD).

In contrast, the so-called "Nodogang" (Nowon, Dobong, and Gangbuk Districts) and "Geumgwan-gu" (Geumcheon, Gwanak, and Guro Districts), which are outer areas of Seoul, saw declines in market capitalization across the board except for Gwanak District (0.35%). Geumcheon District recorded the largest drop, falling from 13.1848 trillion won to 13.0440 trillion won, a decrease of 1.07%. This was followed by Gangbuk District (-0.62%), Dobong District (-0.47%), Nowon District (-0.24%), Guro District (-0.06%), and Jungnang District (-0.05%), all of which posted negative figures. Out of Seoul's 25 districts, six showed a downward trend in market capitalization. These areas commonly have a low proportion of new apartment buildings and lack competitiveness in terms of school districts, transportation, and living infrastructure. Additionally, their capacity to promote redevelopment and reconstruction projects is weaker compared to the Gangnam area. Among these, the market capitalization gap between Dobong (27.9777 trillion won) and Gangnam is about elevenfold.

Ko Jongwan, head of the Korea Asset Management Research Institute, stated, "The polarization of apartment market capitalization in Seoul is not merely a real estate market issue, but a reflection of broader income polarization that has translated into housing polarization." He added, "As demand concentrates in areas with so-called 'perfect locations'?those with superior education, culture, transportation, green spaces, and hospitals?market capitalization growth is particularly prominent in core areas such as Gangnam and Yongsan." He further noted, "This is a common phenomenon observed in major cities of advanced countries like the United States and Japan, and Seoul appears to be following this trend."