Hyundai Motor to buy KEPCO land for 10.5 tln won

Gangnam, epicenter of real-estate boom

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Published : 2010-04-06 12:40
Updated : 2010-04-06 12:40

Five percent of the nation`s people own 80 percent of the private land within the country and 92.2 percent of people believe that property possession is concentrated to a specific class of people, according to government statistics.
This drive to earn money with property began in the early 1970s to 1980s when the government transformed the rice paddies and dry fields of Gangnam into residential areas, strategically building apartment complexes and giving priority to government officials to buy the units at a premium price. The Gangnam area was the first in Seoul to be developed as a modern residential district.
This was called the myth of `Maljukgeori`? the name for the prairie that stretched eight kilometers from east to west, and five kilometers north to south. What cost 300 won per pyeong in 1966 is now around 50 million won per pyeong.
In 40 years, the land in Gangnam has soared 160,000 times from the original price.
In 1978, the government gave 220 high-ranking government officials and socially prominent people priority in buying units of the Hyundai Apartments in Apgujeong-dong, which enabled them to each collect a premium of around 40 to 50 million won. People who bought land in Gangnam before development have now become millionaires.
Starting in 1981, the government concentrated on developing green areas into residential areas, focusing its attention on Gangnam in order to revive the stagnant economy.
"When the government concentrated development in Gangnam it basically neglected Gangbuk. Gangnam was developed strategically by the government and managed well, too. Education and infrastructure are the two biggest advantages of Gangnam," said Ryu Seoung-jin, a real estate consultant.
"Rich people want to live amongst rich people; so when rich people gather together, prices can only go up, with ritzy shopping centers and modern infrastructure assembling there," he said.
Another big attraction of Gangnam is the level of education there.
Many believe that the prices of houses in Gangnam are unreasonably inflated because of access to high schools of good reputation in the district.
Disputes have occured in the past concerning the educational gap between Gangnam and Gangbuk, with an exceptionally higher number of students from Gangnam being admitted to prestigious universities.
Universities have justified their action, saying schools in Gangnam have overwhelmingly superior academic levels than those in the rest of the nation.
The disparity between Gangnam and Gangbuk has grown so large that where you live in relation to the Han River has become a superficial measure of one`s wealth and social status.
"People don`t think that someone who lives in Gangbuk is rich. You have to live in Gangnam to be called rich. That`s why we call Korea the `Republic of Gangnam`," said Kim Kyeong-suk, a 47 year-old housewife who lives in Gangbuk.
An invisible barrier divides the two sides of the Han River, with each side holding discriminatory views of the other. Even students feel this quiet division.
"Students who go to school and live in Gangnam call students who live in Gangbuk degrading names, a swear word, `Gangbuk-nyeon`," said a 15 year-old student who goes to school in Gangnam.
"Students in Gangnam and Gangbuk have different hairstyles and fashion. Even the way they wear their uniform is different. Gangnam kids are snobby and rich; Gangbuk students are usually perceived as unfashionable and poor," said a student from Gangbuk.
(jkwon@heraldcorp.com)

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