Reconstruction and Mid-Low Price Complexes Lead... Seoul Apartment Prices Rise Again

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[Asia Economy Reporter Kim Hyemin] Seoul apartment sale prices continue to show a steady upward trend. In particular, mid-to-low-priced apartments in outer areas such as Nowon and Gangbuk, as well as reconstruction complexes driven by expectations for redevelopment projects, are maintaining strong performance.

According to Real Estate 114 on the 3rd, the weekly change rate of Seoul apartment sale prices rose by 0.11% compared to the previous week. Reconstruction apartments increased by 0.13%, and general apartments rose by 0.1%.

In Seoul, mid-to-low-priced apartments in outer areas and reconstruction complexes are leading the upward trend. Among the 25 autonomous districts, 16 saw an expansion in price increases. By region, the increases were in the order of ▲Nowon (0.22%) ▲Gangnam (0.19%) ▲Gangbuk (0.17%) ▲Dongdaemun (0.14%) ▲Dobong (0.13%) ▲Dongjak (0.13%) ▲Seocho (0.13%).

In Gyeonggi and Incheon, demand has flowed into areas with transportation benefits, resulting in notable price increases in Pyeongchon New Town in Gyeonggi and the old downtown of Seongnam. Prices rose by 0.09% compared to the previous week. By region, the order was ▲Seongnam (0.11%) ▲Suwon (0.11%) ▲Gunpo (0.1%) ▲Uijeongbu (0.1%) ▲Siheung (0.09%). In Seongnam, Dandae Prugio in Dandae-dong and Hyundai in Eunhaeng-dong, which are related to the extension of Subway Line 8, rose by 5 to 10 million KRW. In Uijeongbu, which benefits from the extension of Line 7 and GTX, Jangam-dong Jugong Complex 2 increased by up to about 5 million KRW.

New towns rose by 0.06% compared to the previous week, with Pyeongchon showing the highest increase at 0.17%.

Despite the seasonal off-peak in the jeonse (long-term lease) market, the imbalance in supply and demand is intensifying due to relocation demand from redevelopment projects, the new lease law, low interest rates, and conversion to monthly rent due to tax burdens. Seoul rose by 0.09% compared to the previous week, with increases in ▲Gwanak (0.18%) ▲Nowon (0.18%) ▲Gangbuk (0.16%) ▲Eunpyeong (0.13%) ▲Gangnam (0.12%).

Gyeonggi and Incheon rose by 0.06%, and new towns increased by 0.03%.

Ye Kyung-hee, senior researcher at Real Estate 114, said, "From this month, the LTV preferential benefits for non-homeowners obtaining mortgage loans have expanded by up to 20 percentage points, making it more likely that buying demand will continue for mid-to-low-priced apartments under 600 million KRW with less financial burden." She added, "Due to the recent shortage of jeonse listings, there is a movement of jeonse demand shifting to buying, so the rise in mid-to-low-priced apartment prices in the outskirts of Seoul and the metropolitan area is expected to continue for some time."

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