Record-High January Deals Spread from Gangnam 3 Districts to Hangang Belt
Seocho at 65%...Highest Among All Seoul Districts
Wide Gap with Nodogang, Where New Highs Account for Only 3-5%
Last month, the proportion of apartment transactions recorded at new all-time high prices in Seocho District, Seoul, reached its highest level since the inauguration of the Lee Jaemyung administration. During the same period, transactions surpassing previous peaks also increased noticeably in the Mayongseong area (Mapo, Yongsan, and Seongdong Districts), showing a pattern of gradual spread starting from prime locations. As a result, there is an assessment that the series of demand-suppression policies rolled out since the June 27 regulations last year have effectively been neutralized, and attention is now focused on whether President Lee's recent warning on social media (SNS) will affect transactions this month.
According to an analysis of data from the Ministry of Land, Infrastructure and Transport's actual transaction price disclosure system, conducted on the 4th at the request of real estate platform Zigbang, the share of transactions at new record-high prices among apartment sales in Seocho District, Seoul, last month (60 cases) was 65%, 5 percentage points higher than the previous month. In other words, 39 out of 60 sales set new price peaks. Considering that this is the highest figure since the June 27 regulations last year, it effectively marks the highest level since the launch of the Lee administration.
Together with Seocho, the other two districts that make up the so-called Gangnam 3 Districts, Gangnam and Songpa, also showed a high proportion of record-high transactions. In Gangnam District, 53% of the 93 total sales last month were at new record prices. Although this is lower than the 60% recorded in November last year, it is 2 percentage points higher than the previous month. In Songpa District, the proportion was 43%, 2 percentage points lower than the previous month but still higher than the Seoul average of 28%.
In the Hangang Belt, including the Mayongseong area, the share of record-high transactions last month was also the highest since the current administration took office. In Mapo District, the proportion of transactions at new record highs rose by 14 percentage points from the previous month to 58%, while Seongdong District saw a 27-percentage-point increase to 61%. Yongsan District also recorded 61%, up 2 percentage points.
In contrast, the atmosphere was different in the Nodogang area (Nowon, Dobong, and Gangbuk Districts) and Geumcheon District. In Nowon District, the share of record-high transactions last month was 5%, higher than the previous month's 3% but still remaining in the single digits. In Dobong District, the figure was 5%, up 4 percentage points from the previous month, and in Gangbuk District it was 4%, up 3 percentage points. Geumcheon District recorded the lowest proportion among all autonomous districts at 3%. Out of a total of 61 apartment transactions last month, only 2 were at new record-high prices.
Because the deadline for reporting a transaction after a sale is 30 days from the contract date, the figures may change. However, based on the statistics available so far, it appears that transactions at new record-high prices have continued this year, following last year, mainly in those areas of Seoul apartments where demand is strong. Yoon Sumin, a real estate specialist at NH Nonghyup Bank, said, "In areas where record-high transactions continue, the share is inevitably high because the number of properties listed on the market is extremely limited," adding, "It seems that those who need to buy are doing so even at higher prices."
However, the fact that President Lee has been posting messages since last weekend and is putting strong pressure on multiple-home owners is expected to be a variable for the share of record-high transactions this month. This is because if properties owned by multiple-home owners are released onto the market, the proportion of record-high deals could decline.
Some observers predict that, due to structural issues, transactions surpassing previous peaks will not fall off sharply. Since all of Seoul has been designated as a land transaction permission zone, buyers are subject to an owner-occupation requirement and must submit a confirmation of lease contract termination stating that the existing tenant will vacate the property. Homeowners who want to sell must come up with ways to get tenants to move out, such as offering a premium, and if tenants do not agree, the property cannot be listed.
Yoon said, "For multiple-home owners to sell their properties before May 9, when the heavier capital gains tax will take effect, either they must have tenants move out or the lease contracts must expire beforehand," adding, "In reality, it is not easy to force tenants to vacate, and the number of properties where contracts naturally expire is unlikely to be sufficient to meet market demand."
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