Since Moon Administration's Inauguration, Apartment Price Gap Between South and North of Han River Widens... '8.3 Million → 12.57 Million Won'

[Asia Economy Reporter Donghyun Choi] Since the launch of the Moon Jae-in administration, the average apartment sale price per 3.3㎡ between the southern and northern sides of the Han River in Seoul has been widening.

On the 16th, Economic Man Lab, a real estate information provider, analyzed the housing price trends from KB Real Estate Live On and found that in May 2017, when the Moon Jae-in administration began, the average apartment sale price per 3.3㎡ in southern and northern Seoul was 27.034 million KRW and 18.736 million KRW, respectively, with a price gap of 8.298 million KRW between the two areas. However, by August this year, the average apartment sale price per 3.3㎡ in southern and northern Seoul rose to 43.453 million KRW and 30.886 million KRW, respectively, expanding the price gap between the two regions significantly to 12.567 million KRW.

Despite the strong investment priority policy for Gangbuk (northern Seoul) promoted by the late former Seoul Mayor Park Won-soon, the price gap between Gangnam (southern Seoul) and Gangbuk apartments has widened, which industry analysts attribute largely to the impact of large-scale development projects in Gangnam. Currently, major development projects such as the Yeongdong-daero Integrated Transit Center in Samseong-dong, the Hyundai Motor Company’s new GBC headquarters, and the Jamsil MICE development project are underway in Gangnam. Although the government has implemented stringent real estate regulations, the abundant apartment demand combined with development benefits in Gangnam makes it difficult to narrow the gap between Gangnam and Gangbuk.

In response, the Seoul Metropolitan Government plans to promote a method to use the development gains generated from Gangnam’s development in Gangbuk. Under current laws, public contribution funds can only be used within the jurisdiction of the district where they were generated, but if the National Land Planning Act is amended, the usage scope of public contributions will expand from the basic local government (city, county, district) to the entire urban planning unit (special city, metropolitan city, special self-governing city, special self-governing province, city, county). This would allow public contribution funds secured in Gangnam-gu to be utilized for projects in Gangbuk districts such as Nowon-gu or Gangbuk-gu, potentially reducing the gap between Gangnam and Gangbuk.

Oh Dae-yeol, head of the research team at Economic Man Lab, said, “Expanding the usage scope of public contribution funds to reduce the apartment price gap between Gangnam and Gangbuk could accelerate development in Gangbuk. However, the preference for owning a ‘smart single home’ in Gangnam apartments is expected to persist.”

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