[Report] House Prices Are Shaking... Apgujeong, a Calm Zone, "No Listings, Prices Are What Sellers Ask"

Increase in Purchase Inquiries Following Swift Integration Planning Announcement
No Listings Due to Land Transaction Permission Zones and Reconstruction Expectations
Most New Transactions at Record Highs Amid Surging Demand

Signs of a decline in housing prices are emerging mainly in the outskirts of Seoul, but in the Apgujeong-dong area of Gangnam-gu, record-high prices continue to be set due to expectations for reconstruction projects. A panoramic view of Hyundai Apartment in Apgujeong-dong (Photo by Ryu Taemin)

[Asia Economy Reporter Ryu Tae-min] "Since the news of participating in the Rapid Integrated Planning (Sinseok Tonghap Gihoek) came out, inquiries about purchases have increased significantly, but since there are no listings, prices are being driven up." (A representative from a real estate agency in Apgujeong-dong, Gangnam-gu, Seoul)

Seoul Mayor Oh Se-hoon's private redevelopment project, ‘Rapid Integrated Planning’ (Sinseok Tonghap Gihoek, abbreviated as SinTong Gihoek), is drawing attention from reconstruction complexes in the Apgujeong-dong area, causing the local market to stir. This is a completely different trend compared to the housing markets in Gyeonggi and Incheon as well as the outskirts of Seoul, which are shrinking. Apgujeong 3 District, the largest in the area with a total of 4,065 households including Hyundai 1~7th phases and 10th, 13th, and 14th phases, as well as Daerim Villate, has decided to participate in the project. Additionally, District 5 (1,232 households) and District 2 (1,924 households) are showing signs of joining the SinTong Gihoek initiative, which is seen as a positive factor.

On the afternoon of the 15th, residents in the Apgujeong area generally showed a favorable attitude toward participating in SinTong Gihoek. Resident Mr. Kim said, "The reconstruction project had been stagnant, but if we participate in SinTong Gihoek, it will proceed quickly, and I like that the public sector does not intervene."

The local real estate industry also welcomes SinTong Gihoek. A representative from a local real estate agency said, "There is a perception that SinTong Gihoek reflects residents' opinions well, so interest is high," adding, "Recently, inquiries from investors have also increased."

However, actual transactions are not easy. Apgujeong-dong is designated as a land transaction permission zone, and due to expectations of reconstruction, there are almost no listings. The head of another local real estate agency explained, "Although asking prices are rising due to reconstruction expectations, there are so few listings, and purchases are not possible except for actual residents, so transaction volume has not changed significantly." Especially, for complexes where the association establishment has already been approved, transferring association member status requires meeting strict conditions: being a single homeowner, owning the property for more than 10 years, and residing for more than 5 years. This makes it even harder to find eligible listings, according to real estate agencies.

In fact, since the Apgujeong-dong complexes were designated as a permission zone on April 27, the transaction volume over seven months until the 16th of this month was only 20 cases. Compared to 314 cases in the seven months before the designation, this is only 6.4%.

Because of this, most new transactions are at record prices. On the 8th of last month, a 116.9㎡ unit in Hanyang 3rd phase was sold for 4.05 billion KRW. This is 1.15 billion KRW higher than the previous transaction price of 2.9 billion KRW in December last year. On the 19th of last month, an 83㎡ unit in Hanyang 1st phase changed hands for 3 billion KRW, rising 900 million KRW in 17 months.

However, there are also voices saying that expectations for SinTong Gihoek are excessive. A representative from another local real estate agency said, "Reconstruction projects do not finish overnight, so participating in Rapid Integrated Planning does not guarantee success," adding, "With the presidential election coming next year, it is necessary to watch the future trend more carefully."

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