Even with Speculation Clampdown, Apgujeong Sees 'Record High Prices'... 5,800 Million KRW Contract for 50-Pyeong Unit

Hyundai 2nd Phase 160.28㎡ Sale Contract Signed Last Month for 5.8 Billion KRW
Amount Increased by 1.5 Billion KRW Compared to December Last Year
Supply Area Price Around 110 Million KRW per Pyeong
All 8 Apgujeong Transactions Set Record Highs After Land Transaction Permission Zone Designation
Preference for a Smart Single Unit and Reconstruction Expectations
"Despite the Transaction Freeze, Signing a Contract Means the Highest Price"

[Image source=Yonhap News]

[Asia Economy Reporter Onyu Lim] In Apgujeong-dong, Gangnam-gu, one of the leading reconstruction apartment complexes in Seoul, a series of record-high prices continues. Recently, contracts have appeared at prices exceeding 110 million KRW per 3.3㎡ of supply area. This is interpreted as a result of the reconstruction expectations spreading since the inauguration of Seoul Mayor Oh Se-hoon and the preference for a ‘smart single home’ due to tightened regulations on multi-homeowners, despite the transaction freeze caused by the designation of the land transaction permission zone.

According to the Ministry of Land, Infrastructure and Transport’s Real Transaction Price Disclosure System on the 1st, a 160.28㎡ (exclusive area) apartment in Hyundai 2nd complex in Apgujeong-dong was sold for 5.8 billion KRW on the 2nd of last month. This is a 1.5 billion KRW increase from the 4.3 billion KRW real transaction price in December last year. The price per 3.3㎡ of supply area reached 111.53 million KRW, the highest level ever recorded in Apgujeong-dong transactions. This apartment, which was traded for 5.43 billion KRW in early April, has continued to set new record prices even after the designation of the land transaction permission zone at the end of April.

According to Asia Economy’s analysis, all eight apartment sale contracts concluded in Apgujeong-dong after the designation of the land transaction permission zone were at record-high prices. The most expensive apartment traded was Hanyang 8th complex, 210.1㎡, which changed hands for 6.6 billion KRW in July. This was an 1.8 billion KRW increase compared to the previous high real transaction price of 4.8 billion KRW in March last year. The lowest-priced apartment traded was Hanyang 1st complex, 64.8㎡, which was contracted for 2.61 billion KRW in July. This was a 260 million KRW increase from the 2.35 billion KRW real transaction price in January.

The Apgujeong reconstruction complexes saw a rapid rise in housing prices as the union rushed to establish itself to avoid the two-year residency obligation for union members announced in the June 17 measures last year. Subsequently, the election of Seoul Mayor Oh Se-hoon, who pledged to revitalize reconstruction, fueled the upward trend. In particular, the government’s increasingly stringent policies targeting multi-homeowners have increased demand for a ‘smart single home,’ attracting cash-rich buyers to Apgujeong-dong, the leading reconstruction area. The government raised the comprehensive real estate tax rate for multi-homeowners from a maximum of 3.2% to 6.0% last year and increased the capital gains tax rate for owners of three or more homes to a maximum of 75% starting in June.

An official from a real estate agency in Apgujeong-dong said, "Since the designation of the land transaction permission zone, transactions involving jeonse (long-term lease deposits) have become impossible, reducing transaction volume to less than one-tenth of before, but demand for a smart single home is concentrated, and record prices are being set every time contracts are signed."

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