Apartments Over 900 Million Won in Seoul Outskirts Triple Rapidly... "Owning a Home, Just a Pipe Dream"

This Year, 878 Transactions Over 900 Million KRW in Nodobang Geumgwan District
175% Increase from 319 Transactions Last Year
Gwanak District Transactions Rose from 4 to 108
More Than Half Are Small to Medium Apartments Under 85㎡

Apartments in Gangbuk viewed from Namsan Photo by Yonhap News

[Asia Economy Reporter Lim Onyu] This year, the volume of apartment sales transactions priced at 900 million KRW or more, the threshold for high-priced housing, in the outskirts of Seoul has nearly tripled compared to last year. In particular, Gwanak-gu saw a 27-fold surge. Despite the government announcing six real estate measures this year alone, 'panic buying' driven by simultaneous surges in sales and jeonse (long-term lease) prices continues, making it even more difficult for ordinary citizens to secure their own homes.

On the 16th, Asia Economy analyzed the Korea Real Estate Board's actual transaction price disclosure system and found that the total number of apartment transactions priced at 900 million KRW or more in the outer Seoul areas of 'Nodogang (Nowon, Dobong, Gangbuk districts)' and 'Geumgwan-gu (Geumcheon, Gwanak, Guro districts)' was 878 as of that day. Last year, there were 319 such transactions in these six autonomous districts. This represents a 175% increase (559 transactions) in just one year. Considering that the deadline for reporting real estate transaction contracts this month is the end of January next year, the increase is expected to be even greater. The proportion of apartments priced at 900 million KRW or more among all transactions in these areas also rose from 1.6% last year to 4.0% this year.

900 million KRW is the threshold for high-priced housing subject to various government regulations. In Seoul, designated as a speculative overheating district, the loan-to-value ratio (LTV) for mortgage loans is limited to 20% for amounts exceeding 900 million KRW. Even single-homeowners are subject to capital gains tax if they sell a house priced over 900 million KRW.

Notably, more than half of the transactions priced at 900 million KRW or more in these areas were for small to medium-sized apartments (85㎡ or less in exclusive area), totaling 452 cases. As a result, even Nodogang and Geumgwan-gu, known as representative middle- to low-priced apartment clusters in Seoul, have seen a sharp rise in purchase barriers for ordinary citizens.

The area with the steepest increase in transactions over 900 million KRW is Gwanak-gu. Last year, there were only 4 such transactions, but this year there were 108. Among these, 46 were small to medium-sized apartments sold at prices exceeding 900 million KRW. For example, the newly built ePyeonhansesang Seoul National University Entrance 1st Complex in Bongcheon-dong, 84㎡, was traded at 1.205 billion KRW, marking the highest-priced transaction in Gwanak-gu. The Doosan complex in Bongcheon-dong, 114㎡, also changed hands at 1.185 billion KRW. Even the 59㎡ units in this complex were traded at 955 million KRW, approaching the 1 billion KRW mark. Besides Gwanak-gu, the other five autonomous districts also saw increases in transactions over 900 million KRW ranging from 77% to as much as 960%, including Gangbuk-gu (5→53), Dobong-gu (8→45), Geumcheon-gu (27→78), Nowon-gu (111→304), and Guro-gu (164→290).

The district with the highest number of apartment transactions over 900 million KRW is Nowon-gu, with a total of 304 cases, of which more than one-third, 111, were small to medium-sized apartments. The Geonyeong 3rd Complex in Junggye-dong, 84㎡, was traded at a peak price of 1.197 billion KRW, marking the highest price in the Nowon area. The Jugong 7th Complex in Sanggye-dong, 79㎡, was also sold for 1.045 billion KRW.

The rapid rise in housing prices in Seoul's outskirts is analyzed to stem from government policy failures. The government strengthened loans for houses priced over 900 million KRW to curb prices in the Gangnam 3 districts (Gangnam, Seocho, Songpa) and 'Mayongseong (Mapo, Yongsan, Seongdong districts),' which led demand to shift toward middle- to low-priced apartments. The jeonse crisis triggered by the new housing lease protection law, including the contract renewal request system and rent ceiling system implemented at the end of July, has also fueled price increases in these areas. According to Seoul Real Estate Plaza, apartment transactions in Seoul last month totaled 4,984, already surpassing the 4,367 transactions in October. Notably, among the top five districts with the highest transaction growth rates out of 25 autonomous districts, four?Guro, Geumcheon, Seongbuk, and Dobong?are outer districts, excluding Gangnam-gu.

Ham Young-jin, head of the Zigbang Big Data Lab, analyzed, "With great anxiety over rising jeonse prices and a reduction in next year's move-in supply, more buyers are trying to purchase apartments even in the outskirts of Seoul."

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