Upstart District Could Revive Seoul’s Northern Half

An apartment reaches a value of up to 5.2 billion won and its property tax amounts to 100 million won a year. Can such an apartment sell well in Gangbuk, Seoul?

High-rise apartments in the Ttukseom commercial complex of eastern Seoul have drawn much attention since being put on the market Monday. Their sales could determine Seoul’s “wealth map.”

If consumers are willing to pay 45 million won per 3.3 square meters, the highest in the country’s history, for an apartment in Gangbuk (north of the Han River), this could change the residential patterns of Seoul’s rich. That means a neighborhood outside of Gangnam (south of the Han River) could attract Korea’s wealthy.

Construction companies say they will try to attract buyers from among the country’s richest 0.1 percent. Property experts warn, however, that extremely expensive homes in Ttukseom could raise housing prices in Gangnam.

○ Will Gangnam residents cross the river?

The Ttukseom commercial complex is considered a “special zone of Seoul Forest.” The complex covers 178,200 square meters and is surrounded by the vast forest spanning 1.16 million square meters. The complex will have 630 high-rise apartments, a hotel, convention center, shopping mall and art center.

So are residents living south of the Han River willing to move north of the river?

Kim Seok-jun, executive director of Royal Walker D&C, which is in charge of selling Hanwha Engineering & Construction’s Galleria Forest, said, “Ttukseom is a brand-new residential area combining first-rate apartments with business and cultural facilities of the best quality. It can be a substitute for Gangnam.”

“Half of 100 Gangnam residents whom I have met showed much interest in the expensive high-rise apartments in Ttukseom. Those living in the posh areas of Dogok-dong and Daechi-dong have put their names on the list of potential buyers.”

Nevertheless, others are not sold on Ttukseom’s prospects.

Kim Yong-jin, marketing manager for the property data Web site Neonet, said, “Gangnam residents will find it tough to move to Ttukseom, leaving behind their communities and convenient facilities in Gangnam.”

○ Creating a community of the rich

Construction companies say the “network effect” will determine the value of Ttukseom from a narrow perspective and the recognition of Gangbuk from a broader perspective. In other words, they say apartments in Ttukseom will become the nation’s top-rated community if they are bought by famous people, and that this will also sway public interest.

The construction industry says it will take almost one year to sell all of the apartments. Builders will seek to create a well-known luxurious community by drawing famous people. This is why they did not flinch when only one qualified buyer expressed interest in purchasing an apartment from Daelim Construction since the company began selling its luxury apartments Tuesday.

Construction marketing staff are considered judges who choose celebrities and focus their marketing on them to create a luxurious community.

A source from a company building luxury apartments in Ttukseom said, “Family members or relatives of conglomerate owners showed the greatest interest in our unofficial promotion activities before we launched public sales. They were followed by businessmen running startups and stars.”

“Potential buyers seem to worry over inheritance and gift taxes more than property tax. I think some people want to buy the luxury apartments to give to their partners or children.”

○ Luxury homes to fuel inflation in Gangnam

If high-rise luxury apartments in Ttukseom create one of the nation’s top residential areas, it will have a positive effect throughout the Gangbuk area. Some experts say that if this happens, more people will put Gangbuk on equal footing with Gangnam.

Reflecting such hope, the prices of existing apartments in Ttukseom this year have increased up to 70 million won. But others warn that the Ttukseom apartments will fuel inflation in Gangnam.

Real estate brokers in the posh Gangnam district of Apgujeong-dong, a neighborhood across the Han River from Ttukseom, say that if consumers are willing to pay 45 million won per 3.3 square meters in Gangbuk, the price of Apgujeong-dong homes could rise to at least 50 million won per 3.3 square meters.

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