Trend of Rising Apartment Prices in Kangnam Area in Seoul Slows down

The cold wind of tax investigations is freezing the fever of investment in the lottery for apartments planned to be renovated in the Kangnam area, Seoul.

According to the present apartment prices in the Kangnam area in Seoul researched by the `Real Estate Bank` a bi-weekly magazine specializing in real estate, the increasing prices for renovated apartments and the lottery, which have been the target of tax investigation, have been going down compared with ordinary apartments in the same area.

While the price of ordinary apartments in the Kangnam area rose 4.3 percent since the tax investigation plan was announced to begin from January 7th to February 4th, the price of renovated apartments rose just by 2.7 percent while the lottery price fell by 0.2 percent.

Although there was favorable news that some apartments were allowed to be renovated, the sale price per one Pyong on the 4th fell by 0.8 percent from 2 weeks before.

This was true not only for Kangnam-ku, but also for the other districts around the Kangnam area like Seocho-ku and Songpa-ku.

The price of the lottery for apartments in Seoul for 2 weeks from the 8th, which the company `Real Estate 114` researched, shows a similar trend as the above.

The price of apartments rose by over 1 percent during this period in Yeongdeungpo (2.91 percent), Jongno (2.31 percent), Eunpyong (2.00 percent), Guro (1.73 percent), Jungnang (1.34 percent), Mapo (1.32 percent), Seongbook (1.28 percent), Yangcheon (1.22 percent), and Seodaemum-ku (1.15 percent).

On the other hand, the rising rate of prices in Kangnam (0.18 percent), Kangdong (0.39 percent) and Seocho-ku (0.81 percent) was much less than the average total rate for the Metropolitan Seoul area.

Jae-Seong Hwang jsonhng@donga.com · koh@donga.com