Price of Rebuilt Apartments Increased

It has been surveyed that the price of rebuilt apartments has been marked up to 10 times higher than that of regular apartments. The price of the rebuilt apartment blocks in Gangnam district has already recovered to the price level at the time before the “October 29th countermeasure.”

In accordance with this skyrocketing movement of price, some experts have indicated that the countermeasures of the government, which focus on regulating the rebuilt apartments, no longer maintain their effectiveness.

As the result of the price survey, which was conducted on April 14 by Uni Asset, a realty information provider, and targeted the 2,497 apartment blocks in Seoul by questioning the realty intermediaries, the rebuilt apartment’s price per pyong is an average of 25.34 million won. This figure increased by about 1.7 million from that of the previous year, 23.57 million won, showing more than a 30 million won increase in the entire price in the case of 18-pyong type apartments.

On the other hand, the regular apartment’s average price per pyong is 9.76 million won, showing a 70,000 won, or 0.7 percent, increase from that of the previous year’s figure of 23.57 million won. The ascension rate of the rebuilt apartments reflects a 10.7 times increasing tendency than that of regular apartments.

“The biggest reason for the skyrocketing upheaval of the rebuilt apartments in Gangnam districts can be attributed to the government’s regulation policy, which has prevented the supply of high-class housings, but failed to satisfy the increasing demands,” remarked Park Hun-soon, a realty intermediary in Seoul.

Classified by districts, the rebuilt apartments in Songpa-Gu have shown the highest increase, from 29.16 million won per pyong at the end of the last year to 32.60 million won as of this March, which is equivalent to a 11.8 percent increase. Gangdong-Gu, 6.5 percent increase, or 22.55 million won per pyong, and Gangnam-Gu, 4.7 percent increase, or 29.07 million won, follow in the ranking. In particular, as the first and fourth Jugong apartment blocks in Songpa-Gu district have begun its rebuilding in earnest, the ascension of the apartment price in Songpa-Gu has been regularized.

Among the normal apartment blocks in Seoul, Yongsan-Gu and Gwangjin-Gu have increased by 2.9 and 2.89 percent respectively, showing the highest ascension rates.

Kwang-Hyun Kim kkh@donga.com