"Price Hiked 50 Million Won Overnight"... Gimpo, Paju, Jamsil, Weekend Bustle

[6·17 Measures First Weekend]
Non-regulated Areas Gimpo and Paju Crowded All Weekend
Prices Rise 50 Million to 100 Million KRW... Sharp Increase
Paju Low-rise Also 700 Million KRW... Balloon Effect Impact
Inquiries Increase in Jamsil Ahead of Land Transaction Permission Zone

An apartment complex in Gimpo-si, Gyeonggi-do

[Asia Economy reporters Moon Jiwon and Lee Chunhee] "The phone has been ringing nonstop all weekend. Since the real estate measures were announced, the asking prices have risen by about 40 million KRW, and there are hardly any listings with jeonse deposits." (Representative of A Real Estate Agency, Unyang-dong, Gimpo-si, Gyeonggi-do)

"By designating it as a land transaction permission zone, the government has essentially acknowledged that the area’s prices will rise. Perhaps because people think this is the last chance, there are many purchase inquiries." (Representative of B Real Estate Agency, Jamsil-dong, Seoul)

The first weekend after the government announced the June 17 real estate measures saw apartment prices surge sharply in various parts of the Seoul metropolitan area. Demand concentrated in areas like Gimpo and Paju in Gyeonggi-do, which were not included in the regulated zones, and in Jamsil, Seoul, which is about to be designated as a land transaction permission zone. Critics argue that the measures intended to stabilize the market are instead making it more unstable.

◆Homeowners raising prices by 50 million KRW overnight... Gimpo is a 'hot market'= According to Asia Economy’s coverage on the 22nd, apartment complexes in Gimpo City saw a flood of purchase inquiries over the weekend, causing listings to disappear and asking prices to rise by tens of millions of KRW.

A representative of A Real Estate Agency in the area said, "The Ban-doyu Bora 2nd complex in Unyang-dong, 59㎡ (exclusive area), was traded in the 360 million KRW range before the measures were announced, but now the base price is 400 million KRW."

In fact, brokerage offices around Gimpo were overwhelmed with calls from buyers throughout the weekend. Even while signing contracts, phones and office lines kept ringing, creating a hectic atmosphere all day. A representative from C Real Estate Agency in Unyang-dong said, "The calls are so relentless that we can’t properly consult investors."

The Hangang New Town Lotte Castle 84㎡ units were traded around 430 million KRW until last month, but current asking prices have surged to 550 million KRW, an increase of over 100 million KRW. A nearby D Real Estate Agency representative said, "There are only a handful of listings left, and there are no listings with jeonse deposits at all," adding, "The buying momentum in Unyang-dong has already surged and passed through."

(Photo by Yonhap News)

◆Homeowners asking 700 million KRW even for low floors... Paju’s sharp rise= The situation in Paju’s Unjeong New Town, which also escaped regulation, was similar. According to local brokers, the actual transaction prices and asking prices for the 84㎡ units at Central Prugio in Mokdong-dong, Paju, rose by 50 million KRW each within four days after the measures were announced.

A representative of E Real Estate Agency near the complex said, "The owner of a 3rd-floor unit raised the asking price by 50 million KRW to 700 million KRW just the day before," adding, "Since there are many interested buyers, it’s natural for homeowners to raise their asking prices." This area is one of the few in the metropolitan area without regulations, and the perception that it has been undervalued has led to a rapid influx of investors.

Another real estate agent said, "The I-Park complex, which has about 3,000 units, has completed pre-inspections and will soon be released, so the atmosphere may change later," but added, "For now, newly built high-rise units require at least 680 million KRW." Although the 'gap' (the difference between the sale price and the jeonse deposit) for the 84㎡ Central Prugio units jumped to the 300 million KRW range, purchase inquiries remain strong.

◆Buying frenzy in Jamsil ahead of permission zone designation= The Jamsil-dong area in Songpa-gu, Seoul, where real estate transactions will require district office approval starting from the 23rd, was bustling all weekend. The government and Seoul City recently designated Songpa-gu’s Jamsil-dong and Gangnam-gu’s Samseong, Daechi, and Cheongdam-dong as land transaction permission zones due to favorable factors such as the Jamsil sports and MICE (Meetings, Incentives, Conferences, and Exhibitions) development projects, leading to a rush of last-minute investment demand.

The 84.99㎡ units in Resentz, Jamsil-dong, were traded at 2.1 billion KRW on the 18th, the day after the measures were announced. This is nearly 200 million KRW higher than the previous transaction price of 1.91 billion KRW. This matches the highest price recorded in December last year, effectively restoring prices to pre-COVID-19 economic downturn levels.

A representative of F Real Estate Agency in Jamsil-dong said, "There has been an enormous amount of transactions from the announcement of the June 17 measures through the weekend." A nearby G Real Estate Agency representative also said, "Everyone is jumping into the last gap investment thinking prices will rise in the long term," adding, "Properties with longer remaining jeonse periods are preferred over those that can be moved into within a few months."

Eunma Apartment, Daechi-dong, Gangnam-gu, Seoul (Photo by Yonhap News)

◆Sudden residency obligation causes backlash: "Will pay fines," "Better to leave empty"= Early-stage reconstruction complexes in Seoul, such as Eunma in Daechi-dong, Gangnam-gu, and Siyoung in Seongsan-dong, Mapo-gu, where a two-year residency obligation has been imposed, have become grounds for criticism of the government’s measures. While showing interest in the government’s supplementary plans, many voiced complaints that excessive regulations have caused significant damage to property rights.

According to local brokers, some homeowners who realistically find it difficult to move in are putting up urgent sale listings, but many plan to evict tenants to meet the residency requirements.

A representative of H Real Estate Agency in Daechi-dong said, "Registered rental housing operators are prepared to pay a fine of 30 million KRW and still move in." Meanwhile, some homeowners reportedly prefer to leave their homes empty. Since the houses are too old or small to realistically move into, they plan to evict tenants and fulfill the residency requirement by simply registering their residence for two years.

As a result, concerns about a sharp rise in jeonse prices due to a decrease in listings are spreading locally. A representative of I Real Estate Agency in Daechi-dong said, "This area has the highest school district demand in Seoul," adding, "The relatively low jeonse prices in the aging reconstruction complexes made them popular, but if the supply suddenly decreases, a jeonse shortage is inevitable."

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