"Mixed Trends in Seoul Metropolitan Area Apartments This Week: Decline in Gangnam 3 Districts, Rise in Nodo-gang"

Continued Mid-to-Low Price Buying in 'Nodogang' and Other Seoul Outskirts Strengthen
Gangnam 3 Districts Decline Amid Weakened Buying Due to Tightened Loan Regulations

[Asia Economy Reporter Kim Yuri] This week, the apartment market in the Seoul metropolitan area experienced a mix of negative and positive factors. Due to the base interest rate cut, the suspension of the private land price ceiling system, and the announcement of the increase in official apartment prices, there were significant regional disparities.

While the Gangnam 3 districts saw a continued decline due to weakened buying demand, the Nodobang area (Nowon, Dobong, Gangbuk districts), where demand for mid-to-low priced apartments under 900 million KRW occasionally continued, maintained an upward trend. The apartment market in the metropolitan area was also led by the Su-Yong-Seong region (Suwon, Yongin, Seongnam), with Osan, Gunpo, and Guri also experiencing larger increases.

According to Real Estate 114 on the 20th, the weekly apartment price change rate in Seoul rose by 0.04%, maintaining a similar trend to the previous week. Reconstruction apartments increased by 0.02%, and general apartments rose by 0.05%. Additionally, new towns and Gyeonggi/Incheon areas increased by 0.03% and 0.14%, respectively.

In Seoul, despite limited transactions due to the impact of COVID-19 and loan regulations, demand for mid-to-low priced apartments under 900 million KRW occasionally continued, driving the upward trend in Nodobang. By region, Dobong (0.23%), Gangbuk (0.19%), Nowon (0.16%), Mapo (0.16%), Gangdong (0.15%), Gwanak (0.14%), and Geumcheon (0.13%) rose in that order. In Dobong, Changdong Jugong Complex 4, Sanggye Jugong Complex 19, and Banghak-dong Shindong-A Complex 1 increased by 5 to 15 million KRW. In Gangbuk, Beondong Jugong Complex 1, Mia-dong SK Bukhan Mountain City, and Samgaksan Ai One rose by 5 million KRW. Conversely, areas with significantly weakened buying demand such as Songpa (-0.08%), Seocho (-0.03%), and Gangnam (-0.01%) continued to decline.

New towns such as Sanbon (0.05%), Gwanggyo (0.05%), Bundang (0.04%), Jungdong (0.04%), and Dongtan (0.04%) rose. In Sanbon, the large-scale Sanbon-dong Jugong Complex 11 increased by about 5 million KRW, and in Gwanggyo, Suwon-si Hadong Gwanggyo Lake Village Chamnuri Lake rose by 10 to 15 million KRW. Bundang saw increases of 5 to 10 million KRW in Seohyeon-dong Hyoja Samhwan, Gumi-dong Mujigae Complex 3 Shinhan, Geonyeong, and Yatap-dong Jangmi Hyundai.

In Gyeonggi/Incheon, Osan (0.38%), Gunpo (0.36%), Guri (0.31%), Yongin (0.25%), Seongnam (0.24%), Suwon (0.21%), Gwacheon (0.20%), and Ansan (0.18%) rose. Osan mainly saw increases in apartments priced below 400 million KRW. This includes Busandong Osan City Xi Complex 1, Naesammi-dong Segyo New Town Hoban Verdiem, and Geumam-dong Geumam Village Complex 6 Humansia Desiang, which rose by 4 to 15 million KRW. Gunpo saw increases of 5 to 10 million KRW in Sanbon-dong Raemian Hyers, Daeyami-dong Daeyami IPARK, and Geumjeong-dong Ssangyong Sweet Dot Home. Meanwhile, Su-Yong-Seong continues to exceed the average metropolitan area growth rate, leading the rise in Gyeonggi Province.

The jeonse (long-term lease) market continued to rise locally in areas with a shortage of jeonse properties and in areas close to workplaces. However, despite the upcoming peak spring moving season, demand did not increase significantly due to the impact of COVID-19. Jeonse prices rose by 0.06% in Seoul, and by 0.01% and 0.03% in new towns and Gyeonggi/Incheon, respectively.

In Seoul's jeonse market, Dongdaemun (0.19%), Dobong (0.17%), Mapo (0.17%), Gangbuk (0.16%), Gwangjin (0.16%), and Gwanak (0.13%) rose. In Dongdaemun, Huigyeong-dong Huigyeong Centreville, Jangan-dong Jangan 1st Hyundai Hometown, and Yongdu-dong Shindong-A rose by 5 to 15 million KRW. Dobong saw increases of 5 to 15 million KRW in Changdong Seoul Garden, Sanggye Jugong Complex 19, and Ssangmun-dong Hanyang 2nd. Mapo saw increases of 10 to 40 million KRW in Gongdeok-dong Raemian Gongdeok 1st, Dohwa-dong Dohwa Hyundai, and Singongdeok-dong Singongdeok e-Pyeonhansesang.

New towns such as Bundang (0.02%) and Pangyo (0.02%) rose, while Wirye (-0.01%) declined. In Gyeonggi/Incheon, the southern Gyeonggi region including Su-Yong-Seong, Osan, and Anyang showed strength.

Lim Byung-chul, chief researcher at Real Estate 114, said, "Due to the COVID-19 crisis, concerns about economic recession, and strengthened loan regulations, the reconstruction and high-priced apartment markets in the Gangnam area are rapidly freezing. Meanwhile, mid-to-low priced apartments in Seoul and the outskirts of Gyeonggi with less strict loan regulations are seeing occasional buying demand, resulting in a mixed trend in the metropolitan apartment market."

Although the base interest rate was cut to a record low on the 16th, government regulations have significantly reduced loan limits for homes priced over 900 million KRW. Additionally, the increase in official prices has raised holding tax burdens, and uncertainties such as the global economic recession are increasing, which could pose considerable burdens on the real estate market. He also noted the possibility that multi-homeowners might put up urgent sale properties before the capital gains tax exemption period expires in June due to holding tax burdens. He added, "If buying demand is significantly weakened due to the economic recession and properties remain unsold and accumulate, a shift to a downward trend is inevitable."

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