Mapo, Seongdong, Gangdong, Gwacheon, and Bundang See Record-Breaking Home Prices... "Last Train Rush" Ahead of New Regulations [Real Estate AtoZ]

Record-High Prices Despite Transaction Slump... "Last Train" Demand Drives Up Home Values
With Gangnam Restricted, Demand Shifts to Mapo, Seongdong, Gangdong, Gwacheon, and Bundang
"Balloon Effect" from Land Transaction Permission Zones Spurs 3 Bill

As Gangnam’s three districts and Yongsan District have been re-designated as Land Transaction Permission Zones, housing prices in leading complexes in non-regulated areas such as Mapo, Seongdong, and Gangdong in Seoul, as well as Gwacheon and Bundang in Gyeonggi Province, are fluctuating. The prices of standard apartments (exclusive area of 84 square meters) are surpassing 3 billion won, with a series of record-high transactions. This trend is analyzed as the result of the fading effect of the June 27 lending restrictions and the lackluster response to the September 7 supply measures. As housing prices soar and concerns grow that these complexes may also be designated as regulated zones, demand has intensified among buyers hoping to make last-minute purchases before new restrictions are imposed.

Godeok Gracium up 24.5% in a Year... "Eopo-sam" Becomes Reality

Olympic Park Foreon in Dunchon-dong, Gangdong-gu, Seoul, where talks of entering the "3 Billion Won Club" are emerging. Yonhap News Agency.

According to the actual transaction price system of the Ministry of Land, Infrastructure and Transport on September 18, an 84-square-meter unit at Godeok Gracium in Godeok-dong, Gangdong District, changed hands for 2.54 billion won on August 30, setting a new record. This complex first saw a transaction at 2.5 billion won on June 14, before lending restrictions were implemented. Since then, there had been no similar high-priced transactions, leading some to speculate that buyers were stuck with unsold units. However, this latest deal, which is 24.5% higher than last year’s peak of 2.04 billion won, proves that Godeok Gracium is leading the price surge among major complexes in the area.

Olympic Park Foreon, considered the top complex in Gangdong, is rumored to have seen an 84-square-meter unit recently traded at 3.25 billion won. Although this transaction has not yet been officially registered, local real estate agencies treat it as a fact. The current official record high is 2.984 billion won, set on July 2. One agency even posted on its blog, "Olympic Park Foreon hits a new record at 3.25 billion won."

An agent at a real estate office in Dunchon-dong explained, "It is believed to be a unit in the most sought-after building and floor of the third section among the four sections," and added, "The price soared as a rare listing appeared for the first time in a while." Compared to the pre-sale price during the 2022 subscription period (1.236 billion to 1.293 billion won for 84 square meters), the current price is about three times higher. The phrase "Eopo-sam" ("Olympic Park Foreon will inevitably reach 3 billion won"), which had circulated among union members, is now becoming reality. At the time of the pre-sale, this complex saw about 1,400 buyers cancel their contracts en masse.

Oksu and Haengdang See 2.5 Billion Won Apartments... Mapo and Gwacheon Near the "3 Billion Won Club"

According to the Korea Real Estate Board, Gwacheon recorded the highest apartment price increase rate among non-regulated areas this year at 11.72%, followed by Seongdong at 10.06%, Mapo at 7.85%, and Bundang at 7.78%. Gangdong ranked seventh with a 6.47% increase. The leading complexes in each area have risen more than 17% compared to last year’s peak, driving the market upward.

In Seoul, Seongdong and Mapo, along with Gangdong, are fueling the "Hangang Belt" heat. An 84-square-meter unit at Oksu Heights in Oksu-dong, Seongdong District, was traded at 2.515 billion won on September 10, joining the "2.5 Billion Won Club" along with Seoul Forest Riverview Xi in Haengdang-dong (2.51 billion won on September 4). Excluding Seongsu-dong, the only complex in Seongdong District to have previously surpassed 2.5 billion won for a standard unit was Oksu E-Pyunhansesang Park Hills (2.52 billion won in June).

A real estate agent in Seongdong District reported, "There are almost no listings. It’s common for buyers to sign contracts the day after viewing on Saturday, and many even pay the deposit without seeing the property at all," describing the urgency in the market.

In Mapo, expectations are rising for the "3 Billion Won Club." An 84-square-meter unit at Mapo Prestige Xi was traded at 2.75 billion won on August 30, easily surpassing the previous record of 2.578 billion won in May. Around the same time, Mapo Xi Hillstate Rachel’s also set a new record at 2.76 billion won. In Gyeonggi Province, an 84-square-meter unit at Gwacheon Prugio Summit was traded at 2.7 billion won on August 30, raising hopes that Gwacheon will soon join the "3 Billion Won Complex" club. In Bundang, Botdeul 8th Complex’s 84-square-meter unit was traded at 2.57 billion won on September 12, solidifying its title as Bundang’s only "2.5 Billion Won Apartment."

Land Transaction Permission Zone "Balloon Effect"

Experts analyze this phenomenon as a result of the "balloon effect" caused by the Land Transaction Permission Zone designation, combined with distrust in government policies. Park Won-gap, Chief Real Estate Expert at KB Kookmin Bank, pointed out, "As core areas such as Gangnam’s three districts and Yongsan are designated as Land Transaction Permission Zones, demand is shifting to leading complexes in non-regulated areas like Gwacheon and Bundang," and added, "The Land Transaction Permission Zone does not eliminate demand; it simply relocates it." On September 17, the Seoul Metropolitan Government re-designated apartments in Gangnam, Seocho, Songpa, and Yongsan as Land Transaction Permission Zones for one year and three months. The city stated, "This re-designation of Gangnam’s three districts and Yongsan is an unavoidable measure to protect the housing stability of genuine homebuyers."

Additionally, the September 7 measures, which granted the Minister of Land, Infrastructure and Transport the authority to directly designate Land Transaction Permission Zones, are seen as fueling the last-minute buying rush. Park explained, "The government has sent a strong signal to the market that it can impose regulations on any area at any time," and analyzed, "This further stimulates anxiety among buyers seeking to purchase before new regulations are announced."

Yang Ji-young, Senior Expert at Shinhan Premier Pathfinder, stated, "Although transaction volume is not high, it is important to note that major complexes continue to break previous record highs," and added, "Demand to secure a ‘smart single unit’ before additional regulations are introduced has now started to move in earnest."