Dilapidated House Sells for 100 Million Won

It is expected that the regulations on some parts of the greenbelt area will be removed near the end of this year. The land price for the areas such as Kangil Dong of Kangdong Gu, and Sanggye 1 Dong and Choonghye Bon Dong of Nowon Gu, has been doubled compared with that of last year.

The Dong A Daily has recently conducted a research on the price changes for three of the seven greenbelt areas in Seoul to be off regulations. In Kangil Dong of Kangdong Gu (114,840 m2), for example, where dilapidated houses of 20–56 m2 were densely located, a house of 20 m2 was sold for 50 million won (approximately $42,000) last year. This year, however, the ongoing average price is up by 100%, thus amounting to 100 million won.

The situation is not much different for Sanggye 1 Dong (38,280 m2), where houses of less than 33 m2 are dotted. In October of last year, a house of 13 m2 was sold for somewhere between 20 million won and 22 million won. Now, however, the price for the same house reaches up to 40 million won.

The price of land for Chonggye Bon Dong (149,160 m2), which is located at the foot of Mt. Boolam and packed with small-sized shabby houses of less than 66 m2, has shot up. A house, which was traded for the price range of 60 million won last October, is now sold for 110 million won.

One realtor, whose office is in Choonggye Bon Dong, said, “The demand has well exceeded the supply. Most popular among the investors are houses of 43 to 52 m2. They are just eager to snatch up any one put up for sale. 70-80% of the total of 1,000 houses seem to have been sold.”

One resident of Sanggye 1 Dong confirmed, “From near the end of last year, land speculators have swarmed this area. Dozens of deals have been made just for one day, raising up the price sharply. They know new apartment complexes will be built here, and they will get huge returns as owners since, in order to begin the construction, they have to be compensated first.”

Regarding this phenomenon, Jin Chul-hoon, Seoul City’s official in charge of zoning and land development, said, “It seems that many investors expect various privileges to be given to them once the development is commenced. That is why the price has shot up. But, the city government would not give them what they expect. We will just try to help the current residents settle down there by building mostly the small apartment units there.”

jefflee@donga.com