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Apartment Prices in Seoul Suburb Begin to Rebound

Posted January. 23, 2009 09:40,   


○ Tumbling prices entice buyers

One hundred mid-size apartments priced at the low 400 million won (290,000 U.S. dollars) range, or 10 units per village, put up for urgent sale have been sold over the past 15 days, real estate agents in the Bundang ward of Seongnam, a southern Seoul suburb, said yesterday.

Lee Hyo-seung, president of Haenaemil Realty in the city’s Seohyeon district, said, “We’ve sold five units over the past two weeks.”

As the trading of apartments up for urgent sale has increased in number, asking prices have also jumped 20 million to 40 million won (14,900 to 29,000 dollars). An owner of a unit for sale at Samsung Hanshin Apartment Complex in the district has raised his asking price from 520 million won (385,000 dollars) last week to at least 600 million won (444,000 dollars).

The number of purchase inquires has also increased. Lee Sook-gyeong, president of Bundang Realty, said, “Inquires were few until last year but we’re getting more than 30 a day nowadays.”

“Expectations are high that when home prices in the Jamsil district of Seoul jump, prices in Bundang will also rise.”

Demand for homes up for urgent sale has increased in Bundang because prices declined sharply in the area last year.

Apartment prices in Bundang are 40 to 50 percent off from their peak in late 2006. Kim Nam-yeong, president of Eutteum Realty, said, “People who predicted home prices would bottom out in January and February this year and kept waited are now apparently taking action.”

○ Pangyo market weighing on Bundang

Though apartments for urgent sale have been sold, there is little demand for homes going for regular prices. Bundang is seeing the same trend as southern Seoul’s upscale district of Gangnam, where asking prices have increased but concluded sales are hard to find.

Hence, most analysts say it is premature to claim home prices in Bundang have begun to perk up.

Buyers of new homes in the Pangyo district of Seongnam, many of whom live in Bundang, are putting their Bundang homes up for sale amid the deepening economic slump, adding downward pressure on home prices in Bundang.

Some Bundang residents even appear poised to return to Seoul, where prices have declined significantly. One self-employed man who moved to Bundang last year said, “When Pangyo New Town is completed, roads to Seoul will likely become more congested and prices will unlikely rise further amid the growing home supply.”

“I will put my home in Bundang up for urgent sale and move to Seoul’s Jamsil district.”

Lim Dal-ho, president of the real estate company Hyeondo Consulting, said, “As apartments up for urgent sale have been sold off, sellers of Bundang homes have raised their asking prices in anticipating a further rise in home prices, but few other buyers are biting.”

“Home prices in Bundang tend to follow the trend in Gangnam in both price hikes and declines.”

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