In the First Week of the New Government, Nationwide Apartment Prices Decline... Prices Rose in Yoon's Favorable Areas

Nationwide Apartment Sale Prices Decline
Yongsan and Gangnam Rebuilding Areas Lead Increases
Gyeonggi Shifts from Stable to Declining
Bundang and Ilsan 1st Generation New Towns Rise
Regional Polarization Expected to Worsen

[Asia Economy Reporter Hwang Seoyul] Apartment prices nationwide showed a downward trend this week following the launch of the new government. Apartment prices in Seoul, which had been on the rise, shifted to a flat trend after just one week. On the other hand, prices increased in areas expected to benefit from President Yoon Seok-yeol's policies. The market anticipates that as regional polarization intensifies, demand for a single, well-located property will also increase.

According to the weekly apartment price trends announced by the Korea Real Estate Board on the 13th, the nationwide apartment sale prices in the second week of May fell by 0.01% compared to the previous week. In the metropolitan area, except for Seoul (0.00%), Gyeonggi (-0.03%) and Incheon (-0.04%) showed a downward trend. Conversely, areas where President Yoon pledged regulatory easing showed an upward trend, indicating a polarization in apartment prices.

In Seoul, which showed a flat trend, the difference between Gangbuk and Gangnam districts was notable. The 14 districts in Gangbuk fell by 0.01% compared to the previous week, while Gangnam rose by 0.01%. However, in Gangbuk, Yongsan-gu (0.04%), where expectations for regional development exist due to the relocation of the presidential office, was the only district where sale prices increased last week. In Gangnam, Gangnam-gu (0.02%) saw an upward trend mainly in reconstruction complexes in Daechi and Apgujeong-dong.

Apgujeong Hyundai Apartment_Real Estate Reference Photo / Photo by Hyunmin Kim kimhyun81@

Gyeonggi (-0.03%) also shifted from flat to a decline, but first-phase new towns such as Bundang, Ilsan, and Jungdong rose. This appears to reflect market expectations for eased reconstruction regulations. Goyang City, where Ilsan is located, saw sale prices rise by 0.03% compared to the previous week, Bundang-gu in Seongnam City rose by 0.03%, and Bucheon, where Jungdong is located, changed from a negative -0.01% last week to a positive 0.02% increase.

In fact, the Hyojachon Daechang Apartment in Bundang-gu, Seongnam City, with an exclusive area of 70.69㎡, was sold for 1.05 billion KRW on the 9th, rising by 60 million KRW from 990 million KRW on the previous transaction date of the 22nd of last month. The Hyundai Apartment (133.42㎡) in Hugok Village 3 Complex, Ilsan Seo-gu, Goyang, set a new record price by being traded at 985 million KRW on the 9th. Both complexes were completed in 1994 and have reconstruction expectations. In the case of Hugok Village 3 Complex, a preparatory committee for an integrated reconstruction project was recently launched together with the nearby 4th, 10th, and 15th complexes.

Areas less benefiting from the Yoon administration, such as the outskirts of Seoul and second-phase new towns, are declining, suggesting polarization in apartment prices. Nowon (-0.02%) and Seongbuk (-0.03%) saw an expanded decline compared to the previous week, and Dobong also fell by -0.02%. Yeongtong in Suwon, where Gwanggyo New Town is located, and Seo-gu in Incheon, where Geomdan New Town is located, recorded -0.10% and -0.07%, respectively, both showing an increased rate of decline compared to the previous week.

Additionally, with the implementation of a one-year postponement of the heavy capital gains tax on multiple homeowners starting from the 10th, it is expected that the phenomenon of demand concentrating on a single, well-located property will intensify. Seo Jin-hyung, co-representative of the Apartment Forum and professor at Gyeongin Women's University, stated, "In a market with a transaction cliff, prices will rise mainly in complexes with positive factors, and regional price polarization will intensify for the time being."

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