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2 out of 10 Apartments are for Sale

Posted January. 09, 2003 22:47,   


A real estate market has been frozen at high speed. Regardless of region, offers have increased largely. On the other hand, a transaction was almost stopped. Centering around Gangnam areas, Seoul, a trading price decreased by tens of million won.

It is just the opposite to an original estimate which the apartment price will increase when an active house-moving season come owing to a start of a winter holiday.

▽Excessive Offerings 〓 According to `Speed Bank`, company of the real estate information, offerings in the apartment market of Seoul was started to be accumulated from last fourth quarter. There are 189,505 offerings as of January 8 (110,190 houses for sale and 79,315 houses for rent). It sharply increased by above 30% over 143,331 houses as of the end of last September (85,661 houses for sale and 57,670 houses for rent).

When 37,000 houses for monthly rent are combined, total apartment offerings of Seoul are estimated at 37,000 houses. When total apartments of Seoul are considered as approx. 1,024,000 houses, there are 2 houses for sale out of 10 houses.

Especially, in areas of Gangnam-gu and Yangcheon-gu, offerings have largely increased. The offerings of Gangnam-gu increased to 11,213 houses increased by 42% over 7,910 houses of the end of last September. The offerings of Yangcheon-gu increased by 52% from 2971 houses to 4504 houses.

In Seodaemun-gu, Seongbuk-gu, Jongro-gu and Jungryang-gu, the apartments for rent doubled one of last September.

▽ No Transaction 〓 Offerings have sharply increased, but its transaction has been contracted. According to the Korea Land Corporation, transacted apartments in Seoul were 15,509 houses decreased by 28% last November over 21,527 houses of last September.

However, experts explained that the actual transaction decreased more when newly-constructed apartments are considered When the apartment buildings are newly constructed, it generally takes one month to move in. Accordingly, when the construction of apartment is completed, there is the increase of trading quantity after one month.

There were 7,386 houses and 8,592 houses of apartment which was newly constructed in Seoul last September and last October respectively. It showed the double increase. In spite of such an increase of apartments, the existing apartment sales market has been completely frozen up.

Gim Chi-Sun, president of Eden real estate agency, Jamsil-dong Songpa-gu Seoul said, the low density area of Jamsil which exceed 20,000 houses has experienced a severe depression.”

▽ Spread of the price decrease 〓 As offerings got accumulated, the apartment price dropped.. Especially, there is a remarkable decreasing trend of the apartment for reconstruction focused by the short-term investors.

One of representative apartment for reconstruction, 13 Pyong of Siyeong apartment, Shincheon-dong Songpa-gu Seoul was sold at 340 million ~350 million won last October. However, its price was 290~300 million won decreased by 50 million won. 13 Pyong of apartment complex 1 Jamsil-dong suddenly declined to 315 million won decreased by 65 million won. Son Gil-Su, president of City real estate agency, Shincheon-dong explained, “Owners which own many houses for the short term profits have continued to offer houses for sale.” Such a situation will be spread to new metropolitan cities. According to the Uniasset, the sale price of apartment in Gwacheon-si Gyeonggi decreased by the average 0.4% over last week. Some complex declined by 5%. 16 Pyong apartment of the apartment complex 7 Burim-dong was sole at 285 million won ~310 million won at the beginning of the month, but it has been recently offered at 270 million won.

Ki-Jeong Ko Ji-Wan Cha koh@donga.com maruduk@donga.com