Panic Buying Surged... Record Highs Flooded Seoul from June 17 to July 10

From Gangnam Apartments Over 2 Billion Won
to Mid-Low Priced Apartments in Nodeugang and Geumgwan Districts
Panic Buying Continues Mainly Among People in Their 30s

Apartment complex in downtown Seoul. [Image source=Yonhap News]

[Asia Economy Reporter Lim On-yu] Following the June 17 real estate measures, so-called 'panic buying' continued, resulting in a surge of record-high apartment prices in Seoul right up until just before the July 10 measures. This phenomenon appeared comprehensively, not only in apartments in Gangnam-gu priced over 2 billion KRW but also in outer areas such as Nowon-gu.

According to the Ministry of Land, Infrastructure and Transport's Real Transaction Price Disclosure System on the 14th, an 84㎡ (exclusive area) apartment in Dogok Rexle, Dogok-dong, Gangnam-gu, Seoul, was traded for 2.65 billion KRW on the 3rd of this month. This is a new record price, rising by 160 million KRW compared to last month's highest price of 2.49 billion KRW. When the government designated Daechi, Samsung, and Cheongdam-dong as land transaction permission zones under the June 17 measures, demand shifted due to a balloon effect, causing housing prices to soar, according to nearby real estate agencies.

The same applies to nearby Gaepo-dong and Yeoksam-dong. On the same day, an 83.7㎡ unit in Jugong Complex 7, Gaepo-dong, was traded for 2.02 billion KRW. This price not only exceeded the previous transaction price of 1.95 billion KRW but also surpassed the highest price of 2 billion KRW set before the December 16 measures last year.

Although the government designated the Jamsil MICE (Meetings, Incentives, Conventions, Exhibitions) complex influence area as a land transaction permission zone to prevent real estate speculation, a balloon effect ultimately appeared in the surrounding areas. Even in the designated land transaction permission zones, numerous record-high prices were recorded until the day before the effective date on the 23rd of last month. An 84㎡ unit in Raemian Daechi Palace, Daechi-dong, was traded for 3 billion KRW, and an 84㎡ unit in Raemian Samsung 1st Complex, Samsung-dong, was sold for 2 billion KRW.

The adverse effects of the measures also appeared in Nodogang (Nowon, Dobong, Gangbuk), where mid-to-low priced apartments are concentrated, as well as in Geumgwan-gu (Geumcheon, Gwanak, Guro). In Nowon-gu, apartments priced over 500 million KRW appeared one after another. Both a 68㎡ unit in Boram Complex 1, Sanggye-dong, and a 49㎡ unit in Jugong Complex 14 were traded at record prices of 500 million KRW. In Guro-gu, a 50㎡ unit in Hanshin Hue Plus, Guro-dong, was sold for 615 million KRW, and an 84㎡ unit in Byeoksan, Gocheok-dong, was sold for 830 million KRW, both at the highest prices. Despite repeated regulations, housing prices rose, and panic buying centered on people in their 30s with weaker financial power continued in these areas, leading to a sharp increase in housing prices.

After the July 10 measures, which announced strengthened tax burdens such as property tax, acquisition tax, and capital gains tax, buying demand seems to have weakened. The real estate market is once again at a turning point. Ham Young-jin, head of the Zigbang Big Data Lab, said, "Some multi-homeowners may put their properties on the market due to tax burdens, but it is highly likely that they will seek exit routes such as gifting during the remaining period until the tax base date next year," adding, "If they choose to hold on, side effects such as a shortage of listings will appear."

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