Even You, Outskirts of Seoul... "Gwanak-gu, Apartments Over 900 Million Won Increase from 4 to 108"

This Year, Geumgwan-gu and Nodo-gang See Triple the Transactions Over 900 Million Won Compared to Last Year
High-Price Apartment Proportion Increases Even in Seoul Outskirts
Homeownership Becomes More Difficult Despite Real Estate Stabilization Measures

View of Gangbuk Apartments from Namsan [Image source=Yonhap News]

[Asia Economy Reporter Lim On-yu] # In Gwanak-gu, Seoul, the number of apartment transactions over 900 million KRW increased from 4 cases last year to 108 cases this year. This means a 27-fold increase in just one year. In Bongcheon-dong, an 84㎡ (exclusive area) unit in ePyeonhansesang Seoul National University Entrance 1st Complex was traded at 1.205 billion KRW, marking the most expensive transaction in Gwanak-gu. A 114㎡ unit in Bongcheon-dong Doosan also changed hands for 1.185 billion KRW. Even a 59㎡ unit in this complex was traded at 955 million KRW, approaching the 1 billion KRW mark.

This year, the volume of apartment sales priced over 900 million KRW in the outskirts of Seoul has tripled compared to last year. Despite the government announcing six real estate measures this year alone, the rapid rise in housing prices and housing insecurity have led to continued 'panic buying' driven by fear, making it even harder for ordinary citizens to secure their own homes.

On the 20th, Asia Economy analyzed the Korea Real Estate Board's actual transaction price disclosure system and found that as of the 16th of this year, there were a total of 878 apartment transactions over 900 million KRW in the outer Seoul areas known as 'Nodogang (Nowon, Dobong, Gangbuk districts)' and 'Geumgwan-gu (Geumcheon, Gwanak, Guro districts)'. Last year, there were 319 such transactions in these six districts. This represents a 175% (559 cases) increase 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 transactions over 900 million KRW among all apartment 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, among transactions over 900 million KRW in these areas, more than half?452 cases?were for small to medium-sized apartments (85㎡ or less). As a result, even Nodogang and Geumgwan-gu, known as representative areas with a concentration of mid-to-low priced apartments in Seoul, have seen a sharp rise in purchase barriers for ordinary citizens.

The area with the steepest increase in apartment transactions over 900 million KRW is Gwanak-gu. It had only 4 cases last year but rose to 108 cases this year. There were also 46 small to medium-sized apartments sold for over 900 million KRW. Other districts with high growth rates include ▲Gangbuk-gu (5 cases → 53 cases) ▲Dobong-gu (8 cases → 45 cases) ▲Geumcheon-gu (27 cases → 78 cases) ▲Nowon-gu (111 cases → 304 cases) ▲Guro-gu (164 cases → 290 cases).

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

The rapid rise in housing prices in the outskirts of Seoul is analyzed to stem from government policy failures. The government strengthened loans for houses priced over 900 million KRW to curb prices in the three Gangnam districts (Gangnam, Seocho, Songpa) and 'Mayongseong (Mapo, Yongsan, Seongdong districts)', which caused demand to shift toward mid-to-low priced apartments. The surge in housing prices intensified the psychology of 'it's difficult to buy a house unless it's now,' triggering panic buying among the 20s and 30s age group.

The rental crisis triggered by the implementation of the new Housing Lease Protection Act, including the right to request contract renewal and the cap on rent increases at the end of July, has also fueled the rise in housing prices in these areas. More people are trying to secure their own homes in the outskirts instead of facing housing insecurity. According to Seoul Real Estate Plaza, apartment transactions in Seoul last month totaled 4,984 cases, already surpassing the 4,367 cases in October. Among the top five districts with the highest transaction growth rates among the 25 districts, four?Guro, Geumcheon, Seongbuk, and Dobong?are outer districts, excluding Gangnam-gu.

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