"Reconstruction, Decline After 17 Weeks"... Seoul Apartment Price Increase Narrows

Seoul Sale Prices Rose 0.09% but Growth Slows
Jeonse Maintains Moderate Uptrend Despite Winter Off-Season

[Asia Economy Reporter Kim Yuri] The sales prices of reconstruction apartments in Seoul have turned downward for the first time in 17 weeks since August 30 last year. The atmosphere is significantly dampened by investment sentiment due to the sudden announcement of the 12·16 measures. At the beginning of the year, both the government and Seoul City expressed concerns about speculative demand, and additional measures related to source of funds investigations, loans, taxes, and supply were also discussed. Since it takes about 1 to 2 months to verify the actual effects after the announcement of the 12·16 measures, movements aimed at exploring the direction are expected to continue for the time being.

According to Real Estate 114 on the 10th, apartment prices in Seoul rose by 0.09% this week. After the announcement of the 12·16 measures, the rate of increase has slowed for three consecutive weeks (excluding the first week of January when price statistics were not compiled). Reconstruction apartments fell by 0.03%, but general apartments rose by 0.11%. New towns and Gyeonggi·Incheon rose by 0.03% and 0.04%, respectively, maintaining a similar trend to the previous survey.

In Seoul, non-Gangnam areas are leading the price increases. However, compared to the end of December, the rate of increase has noticeably slowed. The Gangnam area, where high-priced houses are concentrated, has moved away from the top regions in terms of growth rate, and five out of the 25 districts in Seoul showed only flat fluctuations.

Prices rose in the order of Mapo (0.23%), Nowon (0.21%), Yangcheon (0.21%), Guro (0.20%), Gwanak (0.17%), Gangdong (0.15%), Dongjak (0.13%), and Gangnam (0.12%). In Mapo, both buyers and sellers have become less active compared to last year, with Ahyeon-dong Mapo Raemian Prugio, Yeomni-dong Samsung Raemian, and Sangam-dong World Cup Park 3 complexes rising by 5 million to 20 million KRW. In Nowon, Sanggye-dong Sanggye Jugong 3 complex rose by 5 million to 25 million KRW, and Jangmi in Hagye-dong rose by 5 million KRW. On the other hand, in the reconstruction market, Jamsil-dong Jugong 5 complex in Songpa-gu fell by 10 million to 55 million KRW, and several reconstruction complexes located in Gangdong-gu, Yangcheon-gu, Yongsan-gu, and Dongdaemun-gu showed signs of weakening.

In new towns, transactions are continuing mainly in relatively less risen areas. Gimpo Hangang (0.07%), Pyeongchon (0.05%), Dongtan (0.05%), Ilsan (0.04%), Bundang (0.03%), Sanbon (0.02%), and Pangyo (0.02%) rose in that order. In Gimpo Hangang, Jangni-dong Chodang Village Joongheung S-Class Liberty and Chodang Village Unam Firstville rose by 5 million to 20 million KRW. In Pyeongchon, Pyeongchon-dong Chowon Daewon, Hogye-dong Mokryeon Sindonga 9 complex, and Bisan-dong Gwanak Booyoung 4th complex rose by 5 million to 10 million KRW. In Dongtan, Jangji-dong Dongtan 2 New Town Hoban Verdiem 6th complex and Bansong-dong Dongtan Solbit Village Sindobrenyu rose by 5 million to 15 million KRW.

In Gyeonggi·Incheon, Suwon (0.08%), Incheon (0.07%), Gwangmyeong (0.07%), Anyang (0.07%), Seongnam (0.05%), Bucheon (0.04%), and Gwacheon (0.03%) rose in that order. Suwon has recently been recognized as an undervalued area, and demand has been steadily flowing in. Mangpo-dong e-Pyeonhansesang Yeongtong 2nd complex, Yeongtong-dong Byeokjeokgol Samsung, and Woncheon-dong Woncheon Jugong rose by 5 million to 25 million KRW. In Incheon, Songdo-dong Songdo The Sharp First Park in Yeonsu-gu, Cheongna Prugio and Cheongna Moon Good Morning Hill in Seo-gu, centered on the Free Economic Zone, rose by 5 million to 20 million KRW. In Gwangmyeong, Cheolsan-dong Cheolsan Raemian Xi rose by 5 million to 10 million KRW.

The jeonse (long-term lease) market continued a gentle upward trend due to a shortage of properties even during the winter off-season. Seoul rose by 0.07%, new towns by 0.03%, and Gyeonggi·Incheon by 0.02%.

In Seoul, jeonse properties were relatively scarce in complexes with excellent transportation, school districts, and infrastructure. Jeonse prices rose in the order of Gangseo (0.17%), Mapo (0.16%), Gangnam (0.15%), Yangcheon (0.15%), Seongbuk (0.10%), and Songpa (0.10%). In Gangseo, Hwagog-dong Ujangsan IPARK, e-Pyeonhansesang, Yeomchang-dong Riverside Hillstate, and Deungchon-dong Daedong Hwangtobang 1st complex rose by 5 million to 35 million KRW. In Mapo, Ahyeon-dong Mapo Raemian Prugio, Yonggang-dong e-Pyeonhansesang Mapo River Park, and Yeomni-dong Samsung Raemian rose by 5 million to 15 million KRW. In Gangnam, Gaepo-dong Raemian Bless Tige and Daechi-dong Raemian Daechi Palace 1st complex rose by 10 million to 50 million KRW. In Yangcheon, Sinjeong-dong Mokdong Park Xi rose by 10 million KRW.

In new towns, prices rose in the order of Pyeongchon (0.09%), Ilsan (0.07%), Dongtan (0.06%), Wirye (0.02%), Bundang (0.01%), and Pangyo (0.01%). In Gyeonggi·Incheon, prices rose in the order of Suwon (0.06%), Yongin (0.05%), Seongnam (0.04%), Uiwang (0.04%), Gunpo (0.03%), and Hanam (0.03%).

The 9·13 measures announced in 2018 took about two months for Seoul reconstruction prices to decline. In contrast, the 12·16 measures in December 2019 saw reconstruction prices turn weak in less than a month. Yoon Ji-hae, senior researcher at Real Estate 114, said, "Considering that the reconstruction market, which generally attracts a lot of investment demand, moves ahead of general apartments, the overall price movement in Seoul is expected to shrink." She added, "Since a balloon effect is also appearing toward non-Gangnam areas where houses priced below 900 million KRW, which have less loan restrictions, the direction of price trends will become clearer around the Lunar New Year holiday at the end of January." The jeonse market is seeing rental demand based on school district demand and subscription waiting demand, centered on Seoul and new towns. However, since jeonse properties preferred by consumers are relatively scarce, the price increase trend is not expected to easily subside.

This content was produced with the assistance of AI translation services.