One out of Four Apartments’ Price Rose by More Than 50 Million Won This Year

One apartment house in Seoul out of four has seen its price increase by more than 50 million won since January.

On October 6, Real Estate Bank, a real estate consultancy, reported that according to its survey of the variations in the prices of 987,138 apartment houses (2,308 apartment block, 6657 types of Pyong) in Seoul from January to September, 25.6 percent of those (252,974 houses, 1195 types of Pyong) have increased by more than 50 million won.

In particular, 128,698 houses (over 13 percent, 471 types of Pyong) have seen the prices rise by more than 100 million won, and 120,417 houses (96.4 percent, 408 types of Pyong) out of them are located in Kangnam-gu, Seocho-gu, Songpa-gu, Kangdong-gu, etc., all of which belong to Kangnam area.

The fastest-rising block was ‘Tower-Palace the first, of 124 Pyong’ in Dogok dong, Kangnam-gu, whose price increased by 1,135 million won from 2,765 million won in January to 3,900 million won in September. The prices of the other three types in the same block have increased by more than 100 million won, too. The second fastest-rising block was the ‘Hankang Mansions’ of 55 Pyong and 51 Pyong in Ihchon 1-dong, Yongsan-gu, whose prices jumped by 515 million won and 465 million won respectively.

According to this survey, the prices of the houses in the Kangnam area and reconstructed apartments rose much more than those of the houses in Kangbuk area and ordinary apartments, overshadowing all the market stabilization policies concentrated on the reconstructed apartment houses in Kangnam area.

Analyzing the price changes by area, although the change ratios of Kangdong (28.3 percent), Songpa (26.2 percent), Kangnam (23.9 percent), Seocho (13.0 percent) in Kangnam area surpassed 10 percent easily, those of Kangbuk (2.7 percent), Sungbuk (2.6 percent), Dobong (1.8 percent) in Kangbuk area stayed close to 1-2 percent. Thanks to this expansion of the price gap between the Kangnam and the Kangbuk area, the deposit money for the lease of a house per 1 Pyong(7.15 million won) now exceeds the average retail price of houses in the seven districts of Kangbuk area(6.48 million won in Rohwon-gu, 5.99 million won in Dobong-gu). Also, the average retail price of an apartment house in Seoul rose by 14.6 percent until September this year, while that of reconstructed apartments jumped by 31.3 percent, outdoing 8.5 percent of ordinary apartments.

Cheol-Yong Lee lcy@donga.com