Seoul apartment prices are splitting sharply by district. Since the Aug. 3 tax overhaul, high-priced reconstruction complexes in Gangnam valued above 3 billion won have seen a string of sales at hundreds of millions of won below prior deals. Meanwhile, mid-priced apartments along the Han River in Mapo, Yongsan and Seongdong and in outer Seoul are setting record prices even as transaction volumes shrink. With the burden of taxes and lending curbs concentrated on expensive reconstruction projects, the price gap between Gangnam and the rest of the city is narrowing quickly.
Data from the Ministry of Land, Infrastructure and Transport's actual transaction price system on the 27th showed a series of deals this month well below previous recorded prices at major Gangnam reconstruction complexes, including Eunma Apartments and Gaepo Jugong in Gangnam District, Apgujeong Hyundai, and Shinbanpo 2 in Jamwon-dong, Seocho District.
A 76.9-square-meter unit at Eunma Apartments in Daechi-dong sold for 3.02 billion won on the 2nd. That is 320 million won lower than the 3.34 billion won recorded on Aug. 1, a drop within a single month. An 83.7-square-meter unit at Gaepo Jugong 7 changed hands for 3.5 billion won on the 22nd, down 330 million won from its recorded price two months earlier. An 83-square-meter unit at Gaepo Jugong 6 sold for 3.4 billion won on the 19th, nearly 500 million won below its previous high of 3.895 billion won set in January.
Declines are steeper around Apgujeong. A 10th-floor, 82-square-meter unit at Hyundai 5, part of the Apgujeong District 3 reconstruction zone, 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 Apgujeong District 1 also sold the same day for 5.2 billion won, more than 1 billion won below the 6.25 billion won paid in March.
Unlike Gangnam, large complexes in the 2 billion won range along the Han River belt north of the river, in Mapo, Yongsan and Seongdong, are setting records or holding near earlier peaks. A 59-square-meter unit at Mapo I-Park Fore in Sinsu-dong, Mapo District, sold for 2.145 billion won this month, a record. An 84-square-meter unit at Mapo Xi in Yeomri-dong changed hands for 2.6 billion won, holding at its previous record level.
An 84-square-meter unit at Lotte Castle Classia in Gireum-dong, Seongbuk District, 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 level well above the 1.7 billion won range seen last year. A 59-square-meter unit at Oksu Park Hills in Seongdong District sold for 2.4 billion won on the 2nd, approaching its record of 2.43 billion won set in October last year.
Rising prices are also continuing at reconstruction and mid-priced complexes in outer Seoul valued around 1 billion won. A 49-square-meter unit at Sanggye Jugong 7 in Nowon District sold for 780 million won on the 17th, up 130 million won from April. A 59-square-meter unit at Donga Chungsol in Chang-dong, Dobong District, sold for 918 million won, and an 84-square-meter unit at Hyundai Apartments in Gaebong-dong, Guro District, sold for 1.195 billion won, both setting records.
The divergence also shows up in Korea Real Estate Board data. In the seven weeks from the Aug. 3 tax overhaul through last week, apartment sale prices in northeastern Seoul rose 2.49%, while southeastern Seoul fell about 0.49%. The cumulative gap between the two areas is close to 3 percentage points.
Since Aug. 31, when southeastern Seoul turned lower, the weekly gap between northern Seoul and the southeast has run between 0.45 and 0.49 percentage points for four consecutive weeks. It is the first such stretch since the data series began in May 2012. Last week the gap in sale price growth between the two areas widened to 0.49 percentage points, a record.
Market watchers say the opposite moves in high-priced Gangnam complexes and in outer and non-Gangnam districts may continue for some time. Nam Hyuk-woo of the Woori Bank real estate research institute said Gangnam apartments are likely to see slower transactions and soft prices for a while, citing uncertainty over the tax overhaul and concerns that high interest rates will persist. In outer districts, he said, instability in the rental market from shrinking jeonse (a lump-sum deposit lease) listings and rising jeonse prices is pushing people buying a home to live in to purchase at record prices, and gains will continue unless jeonse listings increase.
Seoul apartment prices overall extended their advance, matching the longest run of gains 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 prior week as of the 21st, the 85th straight weekly increase. That ties the previous record of 85 consecutive weeks from the second week of June 2020 through the third week of January 2022.
The pace of gains, however, is slowing quickly. Weekly growth in Seoul apartment sale prices narrowed for four straight weeks, from 0.29% in the fourth week of August to 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. Declines deepened in the three Gangnam districts, while gains continued in non-Gangnam areas such as Seodaemun District.
Apartment prices in Gyeonggi Province rose 0.23% from the prior week, above the previous week's 0.18%. Yeongtong District in Suwon jumped 1.09% in a single week, and gains were pronounced across the so-called semiconductor belt, including Gwonseon District in Suwon at 0.66%, Giheung District in Yongin at 0.48% and Dongtan District in Hwaseong at 0.45%.
