'Traumhaus 5th Phase' Approaching 7 Billion KRW in Official Price This Year... Most High-Value Homes See No Adjustment in Official Price

Traum House Phase 5 in Seocho-dong, Seocho-gu, Seoul. [Image source=Yonhap News]

[Asia Economy Reporter Lee Chun-hee] Although public price opinion submissions were concentrated on ultra-high-priced apartment complexes over 3 billion KRW, the actual number of adjustments was minimal. As a result, the top 10 ranked housing prices and rankings remained unchanged.

The Ministry of Land, Infrastructure and Transport announced on the 28th the publicly announced prices of 13.83 million apartment units as of January 1 this year, after owner review and opinion hearing procedures, and deliberation and resolution by the Central Real Estate Price Public Announcement Committee. However, these prices are not final. If there are objections to the determined prices, objections can be filed until the 29th of next month. The final prices of the respective housing units, after reviewing the objections, will be announced on June 26.

According to the announced public prices, the Traumhaus 5th complex in Seocho-dong, Seocho-gu, Seoul (exclusive area 273.64㎡) ranked first nationwide with a public price of 6.992 billion KRW this year. This is an increase of 148 million KRW (1.9%) from last year's 6.864 billion KRW. It is the same price as the preliminary public price announced last month.

Although a record high of 37,410 opinions were submitted on the preliminary public prices of apartment complexes, only about 1% of adjustments for ultra-high-priced housing over 3 billion KRW were accepted. In this public price adjustment, when considering 900 million KRW as the standard for high-priced housing, the number of opinions submitted for units over 900 million KRW far exceeded those under 900 million KRW, but the number of accepted opinions and adjustments including ex officio corrections related to these opinions showed the opposite result.

Looking at the number of downward opinion submissions on this preliminary public price, houses over 900 million KRW accounted for 27,778 cases, 3.7 times the 7,508 cases under 900 million KRW. On the other hand, the number of adjusted units including accepted opinions and ex officio corrections related to these was 16,449 units under 900 million KRW, 3.5 times the 4,683 units over 900 million KRW, showing a completely opposite ratio.

In particular, ultra-high-priced apartment complexes over 3 billion KRW, which account for only 0.14% of the total 13.83 million apartment units, submitted 3,825 downward opinions, representing 19.1% of those units. This also accounts for about 10.8% of all downward opinion submissions.

However, the number of units that actually achieved a price reduction was only 44 units, just 1.2% of the 3,825 downward opinions submitted. Considering that this figure includes ex officio corrections related to accepted opinions, the actual acceptance rate is likely even lower.

Number of households adjusted by opinion and market price for the 2020 official price of apartment housing (Provided by the Ministry of Land, Infrastructure and Transport)

The significant increase in high-priced apartment prices is analyzed to be due to the government's attempt this year to further raise the realization rate through the 'α value'. The Ministry of Land introduced the 'α value' this year in the apartment public price calculation method to enhance the realization rate. Accordingly, for apartment complexes over 3 billion KRW with a realization rate below 80%, the rate was raised up to a maximum increase of 12 percentage points, targeting an 80% realization rate.

As a result, the public price increase rate for apartments over 3 billion KRW this year was 27.4%, the highest among all price brackets. Compared to last year's increase rate of 13.32%, it more than doubled. The realization rate also rose significantly. The realization rate for apartments over 3 billion KRW this year was 79.5%, the highest among all brackets. This is a 10.3 percentage point increase from last year's 69.2%.

Kim Young-han, Director of Land Policy at the Ministry of Land, said, "This year's apartment public prices saw an increase in opinion submissions centered on high-priced housing as the realization rate for apartments over 900 million KRW was raised," adding, "After strictly reviewing the opinions submitted on the preliminary public prices according to the pre-disclosed public price calculation standards, the acceptance rate of opinions also significantly decreased."

As a result, the public prices of other top 10 ranked apartment complexes besides Traumhaus were all set at the same amounts as the preliminary public prices. The apartment 'Hannam The Hill' (244.78㎡) in Hannam-dong, Yongsan-gu, Seoul, ranked second, with a public price of 6.568 billion KRW this year, up 1 billion KRW from last year's 5.568 billion KRW. This is a significant increase compared to Traumhaus's 150 million KRW rise. All other top 10 ranked apartment complexes besides Traumhaus recorded price increases exceeding 1 billion KRW compared to last year.

The third place was the 'I-Park' apartment (269.41㎡) in Samseong-dong, Gangnam-gu. Last year, this apartment ranked 7th nationwide with a public price of 5.04 billion KRW, but this year its public price soared by 1.52 billion KRW to 6.56 billion KRW, significantly improving its ranking. Fourth and fifth places were the 'Mark Hills East Wing' (272.81㎡) and 'Mark Hills West Wing' (273.84㎡) apartments in Cheongdam-dong, Gangnam-gu, with public prices of 6.472 billion KRW and 6.312 billion KRW respectively, each rising about 1 billion KRW from the previous year.

Sixth and seventh places were the 'Samseong-dong Sangji REITs Ville Kyleum' (273.14㎡) apartment in Samseong-dong, Gangnam-gu, and the 'Sangji REITs Ville Kyleum' (214.95㎡) apartment in Dogok-dong. Both saw public prices rise by around 1.2 to 1.4 billion KRW this year to 6.272 billion KRW and 6.248 billion KRW respectively.

The Acro River Park (234.8㎡) in Banpo-dong, Seocho-gu, which last year marked the emergence of apartments priced at 100 million KRW per 3.3㎡, ranked eighth. The public price for this unit was 5.869 billion KRW, up 1.357 billion KRW from last year's 4.512 billion KRW.

Panoramic view of 'LCT' in Jung-dong, Haeundae-gu, Busan. (Provided by POSCO E&C)

Unusually this year, apartment complexes ranked in the top 10 nationwide public prices appeared outside Seoul. The protagonist was 'LCT' (244.62㎡) in Jung-dong, Haeundae-gu, Busan, which began occupancy last November. The public price for this unit was preliminarily set at 5.432 billion KRW this year. Since occupancy started only four months ago, no public price was announced last year. This penthouse, located on the top floor (84th floor) with only two units, had a pre-sale price of 6.796 billion KRW in 2015, equivalent to 69.89 million KRW per 3.3㎡.

The regions with top 10 ranked apartment complexes in public prices were six in Gangnam-gu, Seoul, one in Yongsan-gu, one in Seocho-gu, and one in Haeundae-gu, Busan.

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