Official Value of Expensive Apartment Homes Drop

Due to a decline in the value of expensive apartment homes last year, the number of apartment homes worth more than 600 million won (subject to comprehensive property taxes) has decreased by 18,721 units. This is the first time the number of apartment homes subject to comprehensive property taxes has decreased since the taxes were introduced in 2005.

Though the value of apartment homes in northern Seoul’s three districts, including Gangbuk, has soared by 13.8 to 18.1 percent, apartment homes in the so-called ‘bubble districts,’ such as Gangnam in southern Seoul, where high-priced apartments are concentrated, has plunged by 1 to 7.3 percent.

The Ministry of Homeland and Marine Affairs announced on Tuesday that it will notify the government-assessed prices of 9.33 million apartment homes nationwide on Wednesday. The local government will also publish the government-assessed prices of 4.01 million detached homes the same day. Government-assessed prices, also known as posted prices and the declared value, are used to calculate property taxes and comprehensive property taxes.

Posted prices of apartment homes in the country have risen by an average of 2.4 percent, compared to 2007. This is much lower than a year-on-year increase of 28.8 percent experienced early last year. Posted prices of detached homes have jumped by an average of 4.38 percent.

The official value of apartment homes with an exclusive dwelling area of more than 85 sq. meters has risen by an average of 1.3 to 2.0 percent, while that of apartment homes with an exclusive dwelling area of 85 sq. meters or less soared by 2.9 to 10.6 percent. By region, Incheon, where urban redevelopment projects are being carried out in earnest, saw the biggest rise in housing prices of 14.4 percent. Among cities and counties, Shiheung in Gyeonggi Province where the Shihwa Multi-Techno Valley construction project has been launched, saw the biggest price hike in the nation with 33.5 percent.

The listed prices will be available on the Land Ministry’s Web site, www.mltm.go.kr, or at local government offices until May 30.

jefflee@donga.com