Gangnam Apartment Prices Hit Record Highs, 'Never Stop' Despite Regulations

Overall Market on Hold
Record High Prices in Some New Apartments
in Aging Mid-Rise Complexes in Apgujeong and Gaepo

Gaepo Jugong 5 Complex 54㎡ Sold for 1.9 Billion KRW
Apgujeong Hyundai 7th Complex 144㎡ at 3.98 Billion KRW
Possibility of Seller's Market Shift

[Asia Economy Reporter Donghyun Choi] The momentum in Seoul's Gangnam area, which has become the main target of government regulations, remains strong. Overall, the market is in a holding pattern amid a transaction freeze, but record-high transactions continue in some aged mid-rise complexes in Apgujeong and Gaepo-dong, as well as in certain new apartment complexes.

According to the Seoul Real Estate Information Plaza on the 8th, a 54.98㎡ unit in Jugong Complex 5, Gaepo-dong, Gangnam-gu, Seoul, was sold for 1.9 billion KRW on the 7th of last month. This is a 100 million KRW increase in less than a week after it was sold for 1.8 billion KRW on the 1st of the same month. A 144.2㎡ unit in Hyundai 7th Complex, Apgujeong-dong, was sold for 3.98 billion KRW on the 3rd, which is 100 million KRW higher than the previous highest price of 3.88 billion KRW recorded in October. In the case of Hyundai 6th Complex, a unit that was sold for 3.6 billion KRW in October was traded for 3.75 billion KRW on the 4th of last month.

In the Seocho-gu and Songpa-gu areas, apartment complexes with recent transaction prices higher than previous transactions are also emerging one after another. A 84.49㎡ unit in Raemian Sinbanpo Palace, Jamwon-dong, Seocho-gu, set a new record for that size at 2.63 billion KRW on the 2nd of last month. A 84.99㎡ unit in Helio City, Garak-dong, Songpa-gu, was sold for 1.97 billion KRW on the 2nd of last month, approaching the 2 billion KRW mark for the first time for that size.

As record-high transactions are observed in the three Gangnam districts of Seocho, Gangnam, and Songpa, there is speculation that the market, which had been buyer-favorable since autumn, may shift to a seller-favorable market. According to KB Kookmin Bank's data as of the 30th of last month, the apartment 'Buyer Dominance Index' recorded 98.9. The Buyer Dominance Index is calculated by surveying about 900 real estate agencies to determine whether sellers or buyers are more numerous. The closer the figure is to the baseline (100), the more buyers there are. In the Gangnam area, this index shifted to buyer dominance on September 7 due to measures such as the 8.4 Real Estate Policy, but dropped to 81.4 as of the 2nd of last month. However, it has gradually recovered since then and recently approached 100. A representative from real estate agency A in Apgujeong-dong said, "Several record-high transactions have occurred as reconstruction projects in the area have recently accelerated," adding, "Since there are not many listings, buyers who were previously hesitant are now showing signs of compromising on reasonable asking prices."

This trend in the Gangnam apartment market is also understood to be influenced by the recent strengthening of regulations on multi-homeowners, leading to a preference for owning a single, well-located property. As the government has tightened regulations on multi-homeowners over the past few years, the phenomenon of selling multiple apartments held in provinces and other areas to retain one apartment in Gangnam has intensified. As a result, the average sale price of large apartments (over 135㎡) in Seoul exceeded 2.1 billion KRW for the first time since statistics began in January 2016, reaching 2.1077 billion KRW last month. Compared to the price a year ago, 1.86202 billion KRW, this is a 13.2% (245.75 million KRW) increase. The Gangnam area (11 districts south of the Han River) recorded an average of 2.27588 billion KRW, while the Gangbuk area (14 districts north of the Han River) recorded 1.57675 billion KRW, showing a significant gap between Gangnam and Gangbuk.

In Gangnam, the average sale price was driven up by large apartments concentrated in the three Gangnam districts, which include ultra-high-end complexes. A 156.86㎡ unit in I-Park, Samseong-dong, Gangnam-gu, set a record high at 4.49 billion KRW on the 12th of last month. This is a price increase of over 1 billion KRW in just one and a half years. A 136.68㎡ unit in Seonkyung 1st Complex, Daechi-dong, Gangnam-gu, also set a record high for that size at 3.5 billion KRW on the 17th of last month. In Songpa-gu, large apartments priced over 2 billion KRW are appearing one after another. A 208.28㎡ unit in The Sharp Star Park, Sincheon-dong, Songpa-gu, was traded for 2.015 billion KRW on the 12th of last month, surpassing 2 billion KRW for the first time.

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