Seoul New Apartment Prices Rise 45% Above Pre-sale Prices

Comparison of Nationwide Apartment Sale Prices and Pre-sale Prices Less Than One Year After Moving In on Zigbang
Sale Prices as of the Second Half of Last Year Increased by Over 60 Million KRW Compared to Pre-sale Prices
"The Premium for Newly Built Apartments in 2020 Continues"

Comparison of Nationwide Apartment Sale Prices and Actual Transaction Prices (Table=Zigbang)

[Asia Economy Reporter Lim On-yu] The price of newly built apartments in Seoul that have been occupied for less than a year has risen by more than 45% compared to the pre-sale price. The preference for new homes is clear, and with strengthened redevelopment and reconstruction regulations, the premium on newly built apartments in Seoul is expected to increase further this year.

On the 13th, Zigbang conducted a survey targeting apartments occupied for less than one year and found that the sale price in the second half of last year rose by 68.12 million KRW (12.73%) compared to the pre-sale price. This figure is more than 30 million KRW higher than the first half of last year (33.91 million KRW) and the second half of 2018 (37.7 million KRW). Ham Young-jin, head of Zigbang Big Data Lab, explained, "As demand for newly built and pre-sale apartments increases, the gap between transaction prices and pre-sale prices is widening."

In particular, the sale price of newly built apartments in Seoul rose by 373.19 million KRW (45.32%) compared to the pre-sale price, the largest increase nationwide. The trend in Seoul has spread throughout the metropolitan area. The increase in the metropolitan area was 128.57 million KRW (20.22%). Zigbang stated, "As the price increase of newly built apartments centered in Seoul spreads, regions in Gyeonggi Province have also seen areas where sale prices rose more than 50% compared to pre-sale prices."

Outside of Seoul, regions where sale prices exceeded pre-sale prices by more than 100 million KRW included Daegu (142.4 million KRW), Sejong (140.48 million KRW), and Gwangju (102.87 million KRW). Conversely, some regions such as Gyeongnam (-7.03 million KRW), Gyeongbuk (-2.04 million KRW), and Chungbuk (-0.7 million KRW) experienced declines in sale prices compared to pre-sale prices. The decline in Gyeongnam and Gyeongbuk narrowed compared to the first half of last year, and the decline in Chungbuk was not significant at 0.56%.

Zigbang analyzed, "Since 2018, as pre-sale prices have rapidly increased, the sale prices of apartments occupied for less than one year nearby have also risen sharply compared to pre-sale prices. This is because apartments pre-sold before 2018 have increased in price to match the surrounding new pre-sale prices at the time of occupancy." The premium (sale price - pre-sale price) for newly built apartments is expected to rise further this year. This is because more than 60% of apartments scheduled for occupancy were pre-sold in 2016-2017 when pre-sale prices were relatively low. Especially in Seoul, with strengthened regulations on urban maintenance projects such as reconstruction and redevelopment, concerns about reduced supply of newly built apartments are growing, which may deepen this trend.

However, Zigbang analyzed, "If the effect of lowering pre-sale prices after the implementation of the pre-sale price ceiling system leads to an actual decrease in transaction prices, the extent of price increases may be limited."

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