Apartment buildings in Seoul on June 16, 2020. (Yonhap)
Despite the South Korean government’s all-out efforts to curb the heated property market, apartment prices in Seoul have been soaring recently, with some in upscale residential areas even hitting a record sales prices last month.
According to data compiled by the Ministry of Land, Infrastructure and Transport, a Hannam The Hill apartment unit in Hannam-dong, Yonsan-gu, was recently sold for 7.75 billion won ($6.8 million). The housing unit with a usable floor area of 243.642 square meters beat the previous 7.3-billion won record respectively set by units of a similar size sold at the same complex.
The apartment complex has set a record transaction price every year since 2015.
In January, a 244.749-square-meter apartment unit at the complex was sold at 8.4 billion won, an all-time high in the local property market since 2006 when the government adopted a real property transaction price report system for the first time.
“Although the Korean government has banned mortgage loans for houses priced at 1.5 billion won or above since late last year, the upscale housing segment is an entirely different realm, only available for people with lots of cash,” said an official from the real estate industry, forecasting the market could gather further momentum until the end of this year as home buyers tend to buy investment-worthy properties instead of owning multiple houses.
Some market watchers also said that apartment prices are likely to go up down the road, considering the recent upward move of the housing market.
Based on different data compiled by the state-run Korea Appraisal Board, the city saw the average apartment price increase 5.5 percent on-year to 844 million won this year.
The average transaction price of an apartment unit has continued to increase during the past several years: 563 million won in 2016, 591 million won in 2017, and 686 million won in 2018.
By district, Seongdong-gu saw the average sales price jump 85.3 percent to some 1.08 billion won from 2016 to 2020 while Youngdeungpo-gu saw a 72.9 percent increase to 860 million won during the four years. Gwangjin-gu and Songpa-gu also saw the average apartment price go up by around 70 percent.
Gangnam-gu is the most expensive place to buy a home, as the average apartment price reached some 1.76 billion won, followed by Seocho-gu with 1.66 billion won and Yongsan-gu with 1.46 billion won.
According to the government’s real estate rules unveiled in December, mortgage loans are banned for purchase of houses worth more than 1.5 billion won in areas designated as “speculative,” and “overheated speculative.” A potential home buyer can borrow money at a 40-percent loan-to-value ratio when purchasing a house priced between 900 million won to 1.5 billion won.
By Kim Young-won (firstname.lastname@example.org