Apartment Price Gap Between Gangnam and Gangbuk Shrink

Price differences between apartments in the affluent Gangnam area and Gangbuk area decreased substantially, falling to a level lower than that of October of last year.

According to real estate information provider Dr. Apt. on Wednesday, the average price of apartments in the Gangnam area is 27.94 million won per pyeong (1 pyeong = 3.3 square meters), 18.33 million won higher than that in the Gangbuk area (9.61 million won).

The difference is smaller than the 18.57 million won last October.

Dr. Apt. recently conducted a survey on apartments in four districts of Gangnam and four districts in Gangbuk.

Price differences between apartments in the two areas were 7.7 million won as of March 2003 when Roh administration was inaugurated, and increased to 19.26 million won per pyeong last November.

The big price gap was attributable to increased demand for apartments, which were fueled by development of Eunpyeong New Town and Pangyo New Town, whose newly built apartment were sold at high prices.

The trend started to change since last December, and the price difference is decreasing from 18.91M won in February, 18.63M won in March, and 18.33M won in April, after the government announced January 11 real estate measures.

The price of 54-pyeong H apartments in Samsung-dong, Gangnam-gu fell 350 million won compared to March, which is the biggest drop among apartments in Gangnam. Also, a 31-pyeong apartment in Daechi-dong, Gangnam-gu was sold at 900 million won, 260 million lower than that of last November.

S apartments in Chang-dong, Dobong-gu saw the highest price increase of 25 million won compared to the previous month.

“There is great potential for apartments in the Gangbuk area to rise, but those in Gangnam could fall even further due to the burden of the comprehensive real estate tax,” said Kim Kyung-mi, head of Dr. Apt.’s Research Center.

sukim@donga.com