"From the Bottom to 1.5 Billion KRW" This Area Writes a Turnaround Drama... Home Prices Ignite [Real Estate AtoZ]

Rally Spreads Beyond Mapo, Seongdong, Gangdong, Gwacheon, and Bundang
Gwangjin, Next to Seongdong and Across from Gangnam, Hit Directly by the Balloon Effect
Gwangmyeong Rebounds from -2%... Standard Units Now Selling for 1.5 Billion KRW
Ex

The apartment market in the Seoul metropolitan area is heating up. As Seoul’s Seongdong, Mapo, and Gangdong districts, along with Gwacheon and Bundang in Gyeonggi Province, continue to set new record-high prices, the surge is now spreading to areas that had previously received less attention. This marks the full-fledged onset of the so-called “gap-filling” phenomenon. In particular, Gwangjin District, which forms a key part of Seoul’s Han River Belt, and Gwangmyeong, a major transportation hub in southwestern Gyeonggi Province, are showing significant momentum.

Perspective view of 'Cheolsan Station Xi' to be supplied this month in Gwangmyeong, Gyeonggi Province. It is the first in the Gwangmyeong area to exceed 1.5 billion KRW in sale price for the standard national size (exclusive 84㎡). GS Construction.

According to the Korea Real Estate Board on September 21, for the second week of September (as of the 8th), Seongdong District recorded the highest weekly apartment price increase at 0.41%, followed by Bundang District in Seongnam at 0.34%. Mapo and Gwangjin Districts both ranked third at 0.28%, while Gwangmyeong came in fifth at 0.25%. Traditionally, Seongdong, Mapo, and Bundang have benefited from regulatory spillover effects from the three Gangnam districts and Yongsan. This time, Gwangjin and Gwangmyeong have joined the ranks of the top performers.

For Gwangjin, the cumulative 24-week price increase prior to the June 27 loan regulation was 3.09%, ranking 16th among all districts tracked by the Real Estate Board. In the 12 weeks since the regulation, prices rose an additional 3.06%, making it the fifth-highest increase during that period. Asking prices for large apartment complexes in Guui, Jayang, and Gwangjang-dong have rapidly climbed, resulting in a shortage of listings. Factors driving demand include its proximity to Seongdong and Gangnam, excellent school districts, and the fact that it has so far avoided being designated as a regulated area.

The case of Gwangmyeong is even more dramatic. Before June 27, its cumulative price change was minus 2.17%, placing it near the bottom nationwide (157th out of 178 districts). Over the following 12 weeks, however, prices rebounded by 2.03% (15th overall), narrowing the annual cumulative decline to minus 0.18%. The acceleration of the Gwangmyeong New Town redevelopment, combined with expectations for expanded transportation networks-such as the existing KTX and the planned Shinansan and Wolpan lines-has created a dramatic turnaround. The sale price for the exclusive 84㎡ unit at “Cheolsan Station Xi,” to be supplied this month, has surpassed 1.5 billion KRW for the first time in the Gwangmyeong area, reaching levels higher than some parts of Seoul.

Market observers view this trend as an “expansion of the liquidity-driven rally.” As prices in leading areas soar, demand is shifting to relatively undervalued regions. Nationwide, apartment prices reversed from a 0.2% decline in the 24 weeks before June 27 to a 0.2% increase in the 12 weeks after, bringing the annual cumulative change back to zero. The metropolitan area continues to rise, led by Seoul, while declines in provincial regions-which had previously driven the overall downturn-have also moderated.

According to the Bank of Korea’s recent “July Monetary and Liquidity Trends” report, the average outstanding balance of broad money (M2) reached 4,344.3 trillion KRW. M2 encompasses market liquidity, including cash, demand deposits, and savings deposits. Just one month after the new administration took office, the balance increased by about 36 trillion KRW, up 7.1% from the same month last year. After growing at an annual rate of 5-6% since March, the growth rate jumped into the 7% range. This suggests that market liquidity is being boosted by policies such as consumer coupons aimed at economic recovery.

In South Korea, real estate is often referred to as a “vessel for monetary supply.” This is because more than 70% of household assets are in real estate, creating a strong correlation between money supply growth and housing prices. Furthermore, with the United States cutting its benchmark interest rate for the first time in nine months, expectations are rising that South Korea will soon have no choice but to lower its own rates. When interest rates fall, liquidity increases even further.

Park Wongap, Chief Real Estate Expert at KB Kookmin Bank, stated, “In Gwangjin District, the ‘gap-filling’ phenomenon is accelerating due to its location right next to Seongdong and above Gangnam, combined with expectations for redevelopment.” He added, “Gwangmyeong is also drawing attention as the next step after Gwacheon and Bundang in Gyeonggi Province, with its low price appeal fueling a dramatic reversal.” Park further remarked, “Amid abundant liquidity and a shortage of supply, the surge that began in the three Gangnam districts and Yongsan is spreading like concentric circles to Mapo, Seongdong, Gangdong, Gwacheon, Bundang, and now to Gwangjin and Gwangmyeong.”