Apgujeong and Mokdong Private Reconstruction 'Fever'... 'Anti-Public' Butterfly Effect

Seoul Prime Location Reconstruction Complex Values Soar... Record Highs Continue
Hyundai 1st Phase 196㎡ at 6.3 Billion KRW, 1.15 Billion KRW Above Previous Peak
New Hyundai 12th Phase 182㎡ Traded at 5.75 Billion KRW, Up 1.2 Billion KRW
Mokdong New Town 1st Complex 91㎡ & 2nd Complex 97㎡ Also Exceed 2 Billion KRW

[Asia Economy Reporter Ryu Tae-min] "There is great distrust toward public reconstruction, and with the establishment of reconstruction associations, investors are flocking in. There are many properties trading around 100 million KRW per pyeong." (A representative from a licensed real estate agency in Apgujeong-dong, Seoul)

As suspicions of land speculation by employees of Korea Land and Housing Corporation (LH) have increased distrust in public-led supply, the value of reconstruction promotion complexes in prime areas of Seoul such as Apgujeong-dong and Mok-dong is soaring. While signs of housing price declines are appearing in various parts of Seoul, these areas are continuously recording new highs due to favorable factors such as approval for association establishment and passing the first safety inspection.

Hyundai 1st Complex 196㎡ Sold for 6.3 Billion KRW, ‘Highest Ever Price’... Up by 1.15 Billion KRW

According to the Ministry of Land, Infrastructure and Transport's real transaction price disclosure system on the 28th, a 196㎡ (exclusive area) unit in Hyundai 1st Complex, Apgujeong-dong, Gangnam-gu, was traded for 6.3 billion KRW on the 15th of this month. This price is 1.15 billion KRW higher than the previous highest price of 5.15 billion KRW recorded last month. The 182㎡ unit in Shinhyundai 12th Complex was also traded for 5.75 billion KRW last month, exceeding the previous highest price of 4.5 billion KRW by more than 1.2 billion KRW.

The apartment prices in this area have been on a steep rise since the announcement of the ‘June 17 Real Estate Measures’ last year, which included provisions granting new apartment move-in rights only to association members who have lived in the property for more than two years. Each complex hastened the approval for association establishment to avoid this regulation, accelerating the projects, which acted as a positive factor. In particular, Apgujeong 4th and 5th districts were the first among six districts within the Apgujeong special planning zone to receive association establishment approval last month. The remaining 1st to 3rd districts are also speeding up reconstruction.

The distrust in public reconstruction, which spread after the LH employees' land speculation scandal, is also cited as a cause of the price increase. A representative from a real estate agency in the area said, "As distrust in public projects grows, core private reconstruction complexes with good business prospects are gaining attention. Although these are very high-priced apartments and transactions are not frequent, every transaction is setting a new record price."

Mok-dong New Town Complex 1 (91㎡) and Complex 2 (97㎡) Also Exceed 2 Billion KRW

The Mok-dong New Town area, where reconstruction is actively underway, is also experiencing a streak of record-high prices. A 91㎡ unit in Mok-dong New Town Complex 1 was traded for 2.01 billion KRW on the 1st of this month, 150 million KRW higher than last month. A 97.92㎡ unit in Complex 2 was traded for 2.04 billion KRW on the 20th of last month. The previous highest price for this size was 1.8525 billion KRW in December last year. This means the price has jumped nearly 200 million KRW in just over two months.

The Mok-dong New Town Apartments, totaling 26,635 households, consist of 14 complexes simultaneously pursuing reconstruction projects. In June last year, six complexes passed the final safety inspection for the first time, confirming reconstruction, and currently, Mok-dong Complexes 5 and 11 are awaiting the announcement of the results of the second detailed safety inspection. Industry insiders expect the results to be released after the Seoul mayoral by-election on the 7th of next month. The results for these complexes are also expected to influence the pace of reconstruction projects in the remaining complexes.

Professor Seo Jin-hyung of Gyeongin Women's University (President of the Korean Real Estate Society) said, "Due to recent incidents such as the LH scandal, distrust in public projects has increased, drawing attention to private reconstruction. Additionally, with Seoul mayoral candidates pledging to ease regulations on reconstruction, expectations are growing even more."

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