Seoul Apartment Demand Influx... Price Increase Expands in First Week of New Year, Up 0.14%

First Week of 2021, Upward Trend Continues in the Seoul Metropolitan Area
"Shortage of Jeonse Properties at the Start of the New Year... Tenants' Worries Deepen"

[Asia Economy Reporter Kim Yuri] In the new year of 2021, apartment prices in Seoul and the metropolitan area continued to rise. There has been no significant change in the upward trend of sales and jeonse prices that persisted until the end of 2020. The government is leading efforts to cool down the overheated housing market by promoting transit station areas, semi-industrial zones, public reconstruction, and public redevelopment in Seoul, aiming to secure mid- to long-term supply in urban areas. However, it is expected that considerable time will be needed before actual supply materializes. Nevertheless, if the already announced 3rd New Towns and the utilization of idle land work in combination, it is anticipated to have some effect in stabilizing the home-buying sentiment among the homeless.

According to Real Estate 114 on the 8th, this week, apartment sale prices in Seoul rose by 0.14%, expanding the rate of increase. Reconstruction apartments rose by 0.11%, and general apartments increased by 0.14%. Gyeonggi·Incheon and new towns rose by 0.22% and 0.27%, respectively, showing larger increases.

In Seoul, as in last year, mid- to low-priced apartments led the price increases, with most of the 25 districts showing solid upward trends. In the Gangnam area, expectations for reconstruction and other redevelopment projects attracted demand, while in non-Gangnam areas, demand flowed in due to perceptions of relative undervaluation.

By region, Dobong (0.22%), Jongno (0.22%), Seongdong (0.21%), Songpa (0.21%), Yongsan (0.21%), Gangbuk (0.19%), Dongdaemun (0.19%), Seongbuk (0.19%), and Guro (0.18%) rose in that order. In Dobong, a seller's market formed due to a shortage of properties, and asking prices steadily increased. In Ssangmun-dong, Geukdong and Chang-dong Donga Cheongsol rose by 10 million to 40 million KRW. In Jongno, Hongpa-dong Gyeonghuigung Xi 2nd complex increased by 10 million to 30 million KRW. In Seongdong, Kumho-dong 2-ga Raemian High River, Oksu-dong e-Pyeonhansesang Oksu Park Hills, and Ha Wangsimni-dong Wangsimni KCC Switzen rose by 10 million to 30 million KRW. In Songpa, expectations for remodeling or reconstruction redevelopment projects in older apartments created a somewhat tight supply compared to demand. Garak-dong Ssangyong 1st complex undergoing remodeling rose by 10 million KRW, and Jamsil-dong Jamsil Jugong 5th complex under reconstruction rose by 25 million to 35 million KRW.

In new towns, demand is concentrating in Ilsan, where there is anticipation of improvements in the metropolitan transportation network such as GTX, following the designation of Paju Unjeong and Gimpo Hangang as regulated areas. Ilsan (0.60%), Jungdong (0.59%), Sanbon (0.51%), Pyeongchon (0.28%), Bundang (0.27%), Wirye (0.23%), and Paju Unjeong (0.20%) rose in that order. In Ilsan, Juyop-dong Munchon 7th Jugong, Madu-dong Gangchon 5th Life, and Janghang-dong Hosu 4th LG Lotte rose by 5 million to 15 million KRW. In Jungdong, Boramaju and Sangdong Bandal Geukdong rose by 5 million to 15 million KRW. In Sanbon, Sanbon-dong Ureuk Jugong 7th and Gaya 5th Jugong 1st complexes rose by 2.5 million to 10 million KRW.

In Gyeonggi·Incheon, Goyang (0.68%), Gimpo (0.36%), Bucheon (0.36%), Gwangmyeong (0.30%), Paju (0.30%), and Guri (0.24%) rose in that order. Similar to new towns, the rise in Goyang city was notable due to expectations of metropolitan transportation network improvements. In Goyang, Siksa-dong Wisity Ilsan Xi 4th complex rose by 10 million to 15 million KRW, Tanhyeon-dong Ilsan Doosan We've The Zenith rose by 10 million KRW, and Deogi-dong High Park City Ilsan I-Park 1st complex rose by 7.5 million to 15 million KRW. In Gimpo, Sau-dong Gimpo Sau I-Park, Gamjeong-dong Pureun Maeul Shinhan Silk Valley, and Gochon-eup Oryong Maeul Hanwha rose by 5 million to 10 million KRW. In Bucheon, Sosa-bon-dong Jugong Tranche 4th complex and Ok-gil-dong Ok-gil Hoban Verdiem rose by 4 million to 10 million KRW.

In the metropolitan area jeonse market, the shortage of listings continued into the new year, with Seoul rising by 0.25%, and Gyeonggi·Incheon and new towns rising by 0.20% and 0.28%, respectively.

Seoul jeonse prices showed a significant rise centered in Gangnam due to a continued shortage of properties and reconstruction relocation demand in Banpo, Seocho-gu. Gangnam (0.38%), Gangdong (0.37%), Songpa (0.37%), Gangseo (0.29%), Guro (0.28%), Yeongdeungpo (0.28%), Nowon (0.26%), and Seongbuk (0.25%) rose in that order. In Gangnam, Gaepo-dong The H Honor Hills and Daechi-dong Hanbo Mido Mansion rose by 25 million KRW, and Apgujeong-dong Shin Hyundai rose by 25 million to 50 million KRW. In Gangdong, Sangil-dong Godeok Arteon rose by 25 million KRW, and Godeok-dong Godeok I-Park rose by 10 million to 15 million KRW. In Songpa, Jamsil-dong Woosung 1, 2, 3 complexes and Garak-dong Helio City rose by 15 million to 25 million KRW.

In new towns, Gwanggyo (0.74%), Sanbon (0.45%), Ilsan (0.43%), Jungdong (0.28%), and Pangyo (0.25%) rose in that order. In Gyeonggi·Incheon, Bucheon (0.43%), Guri (0.39%), Goyang (0.38%), Gimpo (0.34%), Suwon (0.29%), Yongin (0.24%), Gwangmyeong (0.19%), and Uiwang (0.19%) rose in that order.

This year, low interest rates, abundant liquidity, and demand for switching from jeonse to sales are stimulating apartment prices in major metropolitan centers. With imminent land compensation for the 3rd New Towns and favorable metropolitan transportation network improvements, the upward trend shows little sign of easing. Yoon Ji-hae, senior researcher at Real Estate 114, said, "The Ministry of Land, Infrastructure and Transport's hastened issues from the new year, such as transit station areas, semi-industrial zones, and high-density development of low-rise residential complexes, as well as expectations from deregulation of reconstruction and redevelopment projects, can stimulate the market in the short term, so a somewhat cautious approach is necessary."

Meanwhile, the shortage of listings in the jeonse market continues even in the off-season due to overlapping reconstruction relocation demand scheduled for the first half of the year and early-year school district demand inflow. He added, "Due to strengthened mandatory residence requirements for landlords, the supply of new jeonse and monthly rental units in newly occupied apartment complexes is also less than before," and "until clear policy supplements are made, the current trend is expected to continue."

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