Rising Expectations for Presidential Office Relocation... Yongsan-gu Turns Upward After 7 Weeks (Comprehensive)

Published 31 Mar.2022 16:13(KST)

Updated 01 Apr.2022 07:59(KST)

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Apartment buildings in the Seoul area (Photo by Yonhap News)

[Asia Economy Reporter Ryu Tae-min] Apartment prices in Yongsan-gu, Seoul, reversed to an increase after 7 weeks amid expectations of the presidential office relocation.

According to the weekly apartment price trend for the third week of March announced by the Korea Real Estate Board on the 31st, as of the 28th, apartment sale prices in Seoul fell by 0.01%. This maintained the previous week's (-0.01%) decline rate.

In Seoul, 18 out of 25 autonomous districts recorded declines. Yongsan-gu, which had fallen by 0.01% last week, rose by 0.01% this week, marking a turnaround after 7 weeks. This is interpreted as a result of growing expectations that development projects in the area, such as the creation of Yongsan Park, the international business district development, and the undergrounding of railroads around Seoul Station, will accelerate due to the anticipated presidential office relocation.

The decline rates in Gangbuk-gu (-0.05% → -0.03%) and Jung-gu (-0.04% → -0.02%), which showed significant drops last week, narrowed. The Gangnam 3 districts, which had turned to an increase or remained flat last week, maintained their rates of change. Gangnam-gu (0.01%) and Seocho-gu (0.01%) continued their upward trend, driven by increased buying demand mainly in Banpo-dong with new constructions along the Han River and record-high prices in reconstruction projects amid expectations of deregulation.

In Incheon (-0.02% → -0.02%), the decline continued. Seo-gu (0.02%) turned to an increase, showing buying demand in some undervalued mid-to-low price areas such as Majon and Dangha-dong. Yeonsu-gu (-0.07%) mainly in Songdo New City, Gyeyang-gu (-0.04%) mainly in Hyoseong and Gyesan-dong, and Bupyeong-gu (-0.03%) mainly in Samsan and Bugae-dong continued to experience a decline due to inventory accumulation.

Gyeonggi-do (-0.03% → -0.02%) saw a slight decrease in the rate of decline. Icheon-si (0.25%) continued its high growth rate. On the other hand, Suji-gu in Yongin (-0.12%) declined due to inventory accumulation and other factors, and Yeongtong-gu in Suwon (-0.08%) declined mainly in new constructions in Yeongtong and Mangpo-dong.

Sejong saw apartment prices fall by 0.14%, a smaller decline compared to the previous week (-0.19%).

Seoul area real estate agency exterior (Photo by Yonhap News)

The apartment jeonse (long-term lease) market maintained a decline rate of -0.04% in the metropolitan area last week. In Seoul, the decline rate narrowed from -0.03% last week to -0.02% this week. Although inventory accumulated in most areas, the spring moving season demand and expanded bank loan limits led to a slight increase in jeonse inquiries, reducing the decline rate slightly.

South of the Han River, Gangnam-gu (-0.01%) and Seocho-gu (-0.01%) saw a reduction in the decline rate due to increased jeonse inquiries mainly in reconstruction and relatively mid-to-low price areas, while Songpa-gu (-0.01%) declined due to inventory accumulation mainly in older buildings in Jangji and Munjeong-dong.

In other metropolitan areas, Incheon recorded -0.11%, a larger decline than the previous week (-0.13%). Seo-gu (-0.21%) declined mainly in Cheongna and Geomdan New Cities, and Yeonsu-gu (-0.38%) declined due to inventory accumulation and falling transactions mainly in large complexes in Songdo New City.

Gyeonggi-do showed the same decline rate of -0.03% as the previous week. Icheon-si (0.25%) and Pyeongtaek-si (0.10%) rose mainly in areas near industrial complexes with good proximity to workplaces and favorable living conditions. Conversely, Dongan-gu in Anyang (-0.31%) declined mainly in Bisan and Pyeongchon-dong due to the impact of new housing supply, and Gwangmyeong-si (-0.15%) declined mainly in Cheolsan-dong.