A decoupling is deepening in Seoul's apartment market as prices in high-end Gangnam rebuilding complexes diverge from the rest of the city. Apartments in Gangnam rebuilding complexes priced above 3 billion won ($2.2 million), hit hardest by the Aug. 3 tax overhaul, are changing hands at 400 million to 500 million won below previous transactions. Meanwhile, riverside apartments in Mapo, Yongsan and Dongjak and mid-priced complexes on Seoul's outskirts keep setting record highs even as transactions dry up. Tax and lending rules are pressing down on prices at expensive Gangnam rebuilding complexes, rapidly narrowing the gap with other districts.
Data from the Ministry of Land, Infrastructure and Transport's actual transaction price system showed on the 27th that recorded sale prices this month at flagship high-end rebuilding complexes in Gangnam — including Eunma Apartments and Gaepo Jugong in Gangnam District, Hyundai in Apgujeong and Shin Banpo 2 in Seocho District's Jamwon-dong — have come in sharply below their most recent transactions in a string of cases.
A 76.9-square-meter unit at Eunma Apartments in Daechi-dong sold for 3.02 billion won on the 2nd, 320 million won less than the 3.34 billion won recorded on Aug. 1. An 83.7-square-meter unit at Gaepo Jugong Complex 7 sold for 3.5 billion won on the 22nd, 330 million won below the price two months earlier. An 83-square-meter unit at Gaepo Jugong Complex 6 sold for 3.4 billion won on the 19th, nearly 500 million won below its previous high of 3.895 billion won in January.
The correction is most pronounced in Apgujeong, the symbol of high-end rebuilding. An 82-square-meter unit on the 10th floor of Hyundai 5, part of the Apgujeong District 3 project, sold for 5.1 billion won on the 7th, down 1 billion won from the 6.1 billion won recorded in February. A 118.63-square-meter unit at Misung 2 in District 1 also sold for 5.2 billion won on the 7th, more than 1 billion won below the 6.25 billion won paid in March.
By contrast, large complexes in the 2 billion won range along the Han River belt north of the river, in Mapo, Yongsan and Seongdong districts, are setting records or holding existing prices. A 59-square-meter unit at Mapo I-Park Forest in Mapo District's Sinsu-dong sold for 2.145 billion won this month, a record. An 84-square-meter unit at Mapo Xi in Yeomri-dong also sold for 2.6 billion won, holding its previous record. An 84-square-meter unit at Lotte Castle Clasia in Seongbuk District's Gireum-dong sold for 1.93 billion won this month, topping 1.9 billion won for the first time. An 84-square-meter unit at Gangbyeon Samsung Sweet in Yongsan District sold for 2.1 billion won on the 19th, holding a price that has jumped from about 1.7 billion won last year. A 59-square-meter unit at Oksu Park Hills in Seongdong District sold for 2.4 billion won on the 2nd, closing in on its record of 2.43 billion won set last October.
Rebuilding complexes on Seoul's outskirts, accessible at around 1 billion won, are also climbing steeply. A 49-square-meter unit at Sanggye Jugong Complex 7 in Nowon District sold for 780 million won on the 17th, up 130 million won from April, extending its gains. A 59-square-meter unit at Donga Cheongsol in Dobong District's Changdong sold for 918 million won and an 84-square-meter unit at Hyundai Apartments in Guro District's Gaebong-dong sold for 1.195 billion won, both records.
The pattern shows up in the statistics as well. According to the Korea Real Estate Board, apartment sale prices in northeastern Seoul rose 2.49% over the seven weeks through last week following the Aug. 3 tax overhaul, while southeastern Seoul fell about 0.49%, leaving the cumulative gap at close to 3 percentage points. Since Aug. 31, when southeastern Seoul turned lower, the weekly gap between northern Seoul and the southeast reached 0.45 to 0.49 percentage point for four straight weeks — the first such stretch since the data series began in May 2012. Last week, the gap in sale price growth between the two areas hit a record 0.49 percentage point.
Analysts expect the divergence between Gangnam and mid-priced outlying districts to continue for some time. Nam Hyuk-woo of the Woori Bank Real Estate Research Institute said, "For Gangnam apartments, there is a high likelihood that slowing transactions and soft prices will persist for a while, given uncertainty over the tax overhaul and concerns that high interest rates will last." Nam added, "In outlying areas, instability in the rental market from shrinking jeonse listings and rising jeonse prices is pushing people buying a home to live in to purchase at record prices, so the upward trend will continue unless jeonse listings increase."
Meanwhile, Seoul apartment prices rose for an 85th consecutive week, matching the longest streak on record. According to the Korea Real Estate Board's weekly apartment price survey for the third week of September, Seoul apartment sale prices rose 0.13% from the previous week as of the 21st, the 85th straight weekly gain. That matches the record 85-week run from the second week of June 2020 through the third week of January 2022.
The pace of gains is gradually slowing. After rising 0.29% in the fourth week of August, Seoul apartment prices gained 0.22% in the final week of August, 0.20% in the first week of September, 0.16% in the second week and 0.13% in the third, narrowing for four consecutive weeks. Declines deepened in the three Gangnam districts, while districts outside Gangnam such as Seodaemun kept rising. Gyeonggi Province apartment prices rose 0.23%, a wider gain than the previous week's 0.18%. Suwon's Yeongtong District jumped 1.09%, with gains also standing out across the chip belt in Suwon's Gwonseon District (0.66%), Yongin's Giheung District (0.48%) and Hwaseong's Dongtan District (0.45%).
