Finally Gangnam... Multiple Record Highs in Gaepo-dong

In the Past Two Days, 8 Out of 12 Transactions Hit Record Highs
Buyers Return to Gangnam Area Amid Nationwide Regulation Standardization
Gaepo Reconstruction Value Soars as '2-Year Actual Residence' Rule Evasion Confirmed

[Image source=Yonhap News]

[Asia Economy Reporter Onyu Lim] A series of record-high prices have been reported in Gaepo-dong, Gangnam-gu, Seoul. As expectations for rising housing prices in the Gangnam area, which had been stagnant, are revived, the influx of demand due to large-scale reconstruction appears to be sharply driving up housing prices. Some analysts say that the government's indiscriminate regulations are rather stimulating the desire for a 'smart single property.'

On the 30th, an analysis of the Ministry of Land, Infrastructure and Transport's actual transaction price reporting system by Asia Economy showed that record-high transactions are occurring indiscriminately among newly built and reconstruction-pursuing apartments in the Gaepo-dong area. Among 12 apartment sales transactions reported in this area over the past two days, 8 were record-high prices. Notably, 7 of the 8 record-high transactions were high-priced apartments in the 2 billion KRW range, where housing mortgage loans are not possible.

The Raemian Blestige 59.96㎡ (exclusive area, 10th floor), which moved in last February, was sold for 2.1 billion KRW on the 7th of this month. This price is 150 million KRW higher than the previous highest price of 1.95 billion KRW (18th floor) recorded last month. Similarly, the newly built complex D.H. Honor Hills 59.74㎡ was confirmed to have changed hands at a record-high price of 2.17 billion KRW on the 11th of last month.

This price increase trend is noteworthy as it comes at a time when the Gangnam apartment market, which had been sluggish due to the government's strong regulations, is regaining momentum. As the government designated 37 areas in the metropolitan area and provinces, where balloon effects were occurring, as regulated zones all at once, buying demand is rather returning to the Gangnam area. According to the Seoul Real Estate Information Plaza, the number of apartment sales transactions in Gangnam-gu this month reached 258, surpassing the transaction volumes of August to October despite more than a month remaining in the reporting period. Prices are also clearly rising. Recently, in Jamwon-dong, Seocho-gu, transactions approached 10 million KRW per 3.3㎡. Acro Riverview Sinbanpo 84㎡ was contracted at 3.45 billion KRW, or 98.57 million KRW per 3.3㎡, setting a record price. According to the Korea Real Estate Board, the areas with the highest housing price increase rates in Seoul last week were also the three Gangnam districts: Songpa, Seocho, and Gangnam-gu.

In particular, the Gaepo-dong area is showing a remarkable price increase trend due to the combined effect of reconstruction. After a large number of low-rise reconstruction complexes moved in, mid-rise Jugong apartments are also applying for union establishment approval one after another, attracting demand. This is because if the union establishment approval is applied for within this year, union members can avoid the obligation to reside in the property. The government previously announced in the June 17 measures that from next year, only union members who have lived for more than two years will be able to receive new apartments. In fact, Gaepo Jugong Complex 5, which received union establishment approval on the 1st of this month, saw a 61.19㎡ (9th floor) unit sold on the 2nd for 2.1 billion KRW, 170 million KRW higher than the previous highest price.

Kim Deok-rye, head of the Housing Policy Research Office at the Korea Research Institute for Housing and Urban Affairs, said, "The core cause of the current rise in Seoul housing prices is supply-demand imbalance," adding, "Since the supply shortage caused by government regulations will continue next year, housing prices will keep rising."

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