"New Apartments Too Expensive": Seoul Home Prices Driven by Old and Semi-New Units Under 10 Years [Real Estate A to Z]

This year, semi-new apartments aged 5 to 10 years led Seoul's apartment price growth by age group
Semi-new apartments chosen as a 'rational second-best' amid fatigue over high presale prices
Established apartments over 20 years old ranked second in price growth, reflecting redevelopment expectations
In contrast, newly built apartments under 5 years old saw a slowdown in price growth compared to a year ago
"Visible progress in redevelopment projects is driving up prices... Revising the excess profit recovery system may be difficult"

This year, the rise in Seoul apartment prices has been driven by older "established" apartments over 20 years old and "semi-new" apartments aged 5 to 10 years. Newly built apartments less than five years old were the only category to see a slowdown, dropping from the top spot in price growth to a lower rank. Analysts attribute this shift to increased burdens associated with high presale prices, while heightened expectations for redevelopment have redirected demand.

Apgujeong Hyundai Apartment. Photo by Hyunmin Kim kimhyun81@

According to the Korea Real Estate Board's "Weekly Apartment Sales Price Index by Age," the cumulative change over 42 weeks this year (from the first week of January to the first week of this month) shows that apartments aged over 5 years but under 10 years in Seoul recorded the highest price increase at 8.31%. Apartments over 20 years old followed with a 7.40% increase. Next were apartments over 10 years but under 15 years (6.58%), under 5 years (6.44%), and over 15 years but under 20 years (5.71%). The Korea Real Estate Board divides apartments into five groups by age for statistical purposes. Seoul is also divided into five regions: Southeast, Southwest, Northeast, Northwest, and Central.

Compared to a year ago, the shift in market leadership is clear. Newly built apartments under five years old led last year with a 7.28% increase. This year, their growth rate dropped by 0.84 percentage points, pushing them to fourth place among the five age groups surveyed. Apartments under five years old were the only group to see a smaller increase this year. In contrast, apartments over 20 years old saw their price growth jump from 3.67% last year to 7.40% this year, a 3.73 percentage point increase. Apartments aged over 5 but under 10 years also saw their growth rate rise from 5.64% to 8.31%, up by 2.67 percentage points. The growth rates for apartments over 10 but under 15 years, and over 15 but under 20 years, also increased by roughly 1 to 2 percentage points.

The fact that "semi-new" apartments aged over 5 but under 10 years posted the highest price gains is attributed to the burden of "high presale prices." According to the Housing and Urban Guarantee Corporation (HUG), as of September, the average presale price for private apartments in Seoul was 45.47 million won per 3.3 square meters. The presale price per 3.3 square meters has continued to rise, from 32 million won in September 2023 to 44.24 million won last year. This marks a 42% increase over two years.

Ham Youngjin, head of the Real Estate Research Lab at Woori Bank, said, "As new apartment presale prices skyrocket, buyers facing price resistance are giving up on new builds and instead choosing semi-new apartments aged 5 to 10 years, which already offer well-established living conditions, as a rational 'second-best' option." He added, "This is the background for why semi-new apartments have recorded the highest price growth across Seoul."

Along with semi-new apartments, another key driver in the market is established apartments over 20 years old. In particular, in the southeastern region (Gangnam, Seocho, Songpa, and Gangdong), where redevelopment issues are concentrated, apartments over 20 years old posted the highest price growth (15.30%) among all regions and all age groups in Seoul. This outpaced not only the overall average for apartments over 20 years old in Seoul (7.40%), but also the southeastern region's under 5 years (8.81%) and over 5 but under 10 years (10.21%). Compared to the same period last year (6.73%), this is an increase of 8.57 percentage points.

In the southwestern region (Yangcheon, Gangseo, Guro, Geumcheon, Yeongdeungpo, Dongjak, and Gwanak), apartments over 20 years old also recorded the highest price growth (6.78%) among all age groups in the area. In the northwestern region (Eunpyeong, Seodaemun, Mapo) and northeastern region (Seongdong, Gwangjin, Dongdaemun, Jungnang, Seongbuk, Gangbuk, Dobong, Nowon), apartments over 5 but under 10 years old posted the highest price increases at 9.71% and 8.78%, respectively. In the central region (Jongno, Jung, Yongsan), apartments over 10 but under 15 years old led with an 8.37% increase.

Park Wongap, Senior Real Estate Specialist at KB Kookmin Bank, said, "The impact is significant as large-scale redevelopment sites in areas such as Apgujeong, Mokdong, and Yeouido are starting to select construction companies, making progress visible." He added, "A series of government signals easing regulations, such as relaxing safety inspections, has also fueled expectations among residents of aging complexes." He predicted, "Since apartments slated for redevelopment are driving up housing prices, it will be difficult for the government to revise the redevelopment excess profit recovery system."