Their Own 'Smart One House'... Apgujeong Large Apartment Record Prices Surge

Despite the Sharp Decline in Seoul Transactions Amid the 7.10 Real Estate Measures,
Record High Prices Continue with Hyundai 7th Complex at 4 Billion KRW and Miseong 2nd Complex at 3 Billion KRW
Speeding Up Reconstruction Association Establishment to Avoid Occupancy Regulations
and a Rush to Switch to a Single Smart Property Due to Heavy Taxes on Multiple Homeowners

View of Hyundai Apartments in Apgujeong-dong as seen from near UN Village, Yongsan-gu, Seoul [Image source=Yonhap News]

[Asia Economy Reporter Lim On-yu] Although the surge in Seoul housing prices has slowed due to the government's ultra-strong real estate regulations, apartments in the Apgujeong-dong area of Gangnam-gu continue to see record-breaking transactions with prices rising by hundreds of millions of won. This is analyzed as a result of the acceleration of reconstruction association establishments to avoid the two-year mandatory residence regulation, combined with investors' 'smart one home' strategy.

According to the Ministry of Land, Infrastructure and Transport's real transaction price disclosure system and brokerage industry on the 31st, a 157㎡ (exclusive area) apartment in Hyundai 7th Complex, Apgujeong-dong, Gangnam-gu, was traded at 4 billion won on the 7th of this month, setting a new record. This price is 300 million won higher than the previous highest price of 3.7 billion won. Three days later, a 144㎡ unit in the same complex was also sold for 4 billion won, which is 330 million won higher than the previous highest price of 3.67 billion won. Nearby, in Miseong 2nd Complex, prices exceeded 3 billion won for the first time. A 140㎡ apartment there was traded for 3.05 billion won on the 11th.

The Seoul apartment transaction market has sharply contracted since the government's July 10 measures. According to the Seoul Real Estate Information Plaza, as of the 31st, the number of apartment sales in Seoul in August was only 2,148. Although the reporting period is still open, this is less than one-eighth of the 15,589 transactions recorded in June. The rate of apartment price increases is also slowing. According to the Korea Real Estate Board, as of the 24th, the weekly apartment price increase rate in Seoul was only 0.01%.

Despite the overall contraction in transactions, the strong price trend in the Apgujeong-dong area is attributed to expectations for reconstruction, according to nearby brokerage offices. Interest from investors has increased as apartments in this area accelerate the establishment of associations to avoid the two-year mandatory residence regulation. The government plans to strengthen regulations by revising the 'Urban and Residential Environment Improvement Act' so that reconstruction complexes establishing associations in speculative overheated districts such as Seoul after next year will only be eligible for new apartment allocations if they have resided for two years.

Currently, Apgujeong 1 District (Miseong 1st and 2nd Complexes) has obtained 55% consent and has applied to Gangnam-gu Office for a maintenance district project. The consent rate for Apgujeong 3 District (Old Hyundai) is reported to have risen to 70%. A representative from A Real Estate Agency in Apgujeong-dong said, "As the association establishment gains momentum and prices rise, inquiries from sellers asking at what price they should list their properties are increasing."

It is also notable that medium to large apartments over 100㎡ are showing strength. Analysts say that due to the government's June 17 and July 10 measures significantly increasing tax burdens on multi-homeowners, purchases are concentrating on 'smart one home' properties. A representative from B Real Estate in the area said, "Because Apgujeong-dong is perceived as the final destination for real estate investment, many multi-homeowners are selling and switching from nearby Daechi, Banpo, and Gaepo-dong areas."

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