Seoul Old Apartment Prices Have Doubled Compared to New Buildings

Seoul Housing Price Increase Rate This Year... Older Apartments > New Apartments
Apartments Over 20 Years Old Up 1.27%
New Apartments Under 5 Years Up 0.7%

Older Apartments, Which Rose Less Than New Ones,
See Buying Frenzy Driven by Reconstruction Expectations

[Asia Economy Reporter Kim Hyemin] This year, prices of old apartments in Seoul have risen more than those of newly built apartments. This reflects the growing number of complexes rushing reconstruction to avoid strengthened regulations and the expectations fueled by candidates advocating real estate deregulation during the Seoul mayoral election.

According to the weekly apartment price trend survey time series statistics by the Korea Real Estate Board on the 12th, prices of apartments in Seoul that are over 20 years old have increased by 1.27% (cumulative) since the beginning of this year. During the same period, prices of newly built apartments completed within the last 5 years rose by 0.7%. The price increase rate of old apartments has surpassed that of new apartments.

By region, prices of old apartments in the southeastern area including Gangnam, Seocho, and Songpa rose the most at 1.6%. This was followed by the northeastern area including Nowon-gu at 1.19%, the southwestern area including Mokdong at 1.17%, the northwestern area at 0.95%, and the downtown area at 0.91%.

This appears to be due to newly built apartment prices already being high, leading buyers to flock to relatively less expensive old apartments, causing prices to "match up." The rush to establish associations in reconstruction complexes in Apgujeong to avoid the "2-year residency requirement for association members" also pushed up old apartment prices this year. Demand has further concentrated on complexes pursuing private reconstruction after the government announced a policy to revitalize public-led reconstruction.

On the 5th of last month, Jamsil-dong Jugong Complex 5 in Songpa-gu, which marks its 44th year since occupancy, traded at a record high of 2.681 billion KRW for an 82.51㎡ (exclusive area). This is nearly a 400 million KRW increase in two months from 2.3 billion KRW in January. The Hyundai 7th Complex in Apgujeong 3 District, Gangnam-gu, completed in 1978 and awaiting association establishment approval, also broke its highest price record by trading at 8 billion KRW on the 5th. This is a 1.3 billion KRW increase from 6.7 billion KRW in October last year, reaching 100 million KRW per 3.3㎡.

These reconstruction complexes have become even more active since Seoul Mayor Oh Se-hoon, who pledged deregulation, was elected. While last year house prices rose due to supply shortages, this year development expectations are likely to stimulate house prices. Yoon Ji-hae, senior researcher at Real Estate 114, said, "If regulations are eased, short-term price volatility is inevitable," adding, "Whether to accept this and expand supply is Mayor Oh's choice."

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