Apartments in the Daecheong-dong area of Gangnam, known as 'School District No. 1', are reportedly recording consecutive high prices. Currently, this area is designated as a land transaction permission zone, but it has been revealed that the Seoul Metropolitan Government is reviewing its designation, leading to soaring prices.
According to the Seoul real estate information plaza on the 28th, the 'Raemian Daechi Palace' in Daecheong-dong recorded a transaction price of 4.38 billion won (18th floor) for a 94 square meter unit on the 9th of this month. This apartment complex, built in 2015, consists of 1,608 units. Although it has been nearly 10 years since its completion, Daecheong-dong remains a relatively preferred area due to the many aged complexes. A larger 114 square meter unit in this apartment also set a record high of 5.2 billion won (21st floor) on the 9th of last month. The national average-sized unit, a 84 square meter apartment, was also traded at the highest ever price of 3.93 billion won (30th floor) on the 23rd of last month.
The 'Eunma Apartment', considered a 'big fish' in reconstruction in Daecheong-dong, also recorded high prices for both unit types last month. The 84 square meter unit was traded at 2.95 billion won (5th floor) on the 25th of last month, and the following day on the 26th, the 76 square meter unit also recorded 2.725 billion won (5th floor). This apartment, now 46 years old, only received its association establishment approval last year, more than 20 years after the reconstruction project was initiated. The Eunma Apartment Reconstruction Maintenance Project Association is preparing to submit a rapid integrated planning application to the Seoul City at the end of January next year.
The 'Daechi Mido', which has been selected as a rapid integrated planning project site for reconstruction since 2021, is also recording high prices for several unit types. The 84 square meter unit was sold at a record high of 3.32 billion won (9th floor) on Oct. 28. Additionally, on the 31st of the same month, the 128 square meter unit was sold for 4.2 billion won (10th floor), and the 159 square meter unit also recorded a high price of 4.3 billion won (2nd floor) on the 20th of the same month. The largest unit, at 161 square meters, also reached a peak price of 4.5 billion won (3rd floor) on Aug. 7.
Daecheong-dong has been designated as a land transaction permission zone by the Seoul Metropolitan Government since June 2020. The land transaction permission system was introduced to prevent speculation, obligating homeowners to reside for two years. Consequently, 'gap investing' using jeonse is not allowed. The Seoul government designated a total of 14.4 square kilometers, including Daecheong-dong, Samseong-dong, Cheongdam-dong, and Jamsil-dong, as land transaction permission zones due to the development of the Global Business Center (GBC) in the area around Samseong-dong and COEX.
However, it has been identified that the prices in the Daecheong-dong area are soaring as the Seoul Metropolitan Government recently reviews the lifting and reduction of land transaction permission zones. Since July, the Seoul government has been conducting studies related to the land transaction permission system and is in the process of establishing criteria for lifting and reducing. At a related forum hosted by the Seoul government on the 19th, a proposal was discussed to manage the land transaction permission zones by subdividing them into 'administrative districts' rather than 'legal districts.'
Additionally, the widening price gap between the Gangnam area of Seoul and the outskirts has also been analyzed in relation to the uncertainty in the market due to the recent state of emergency and the impeachment crisis. According to the Korea Real Estate Board, the sales prices of apartments in Seoul recorded an increase of 0.01% compared to the previous week in the fourth week of this month. However, looking at the details, the prices have turned downward in the outer Seoul districts like Geumcheon-gu (-0.03%), Guro-gu (-0.02%), Nowon-gu (-0.02%), Gangbuk-gu (-0.01%), Gwanak-gu (-0.01%), and Dobong-gu (-0.01%), while major districts in Seoul like Seocho-gu (0.06%), Songpa-gu (0.04%), Gangnam-gu (0.03%), and Yongsan-gu (0.03%) have maintained an upward trend.
An official from a real estate brokerage in Daecheong-dong noted, "There has always been an expectation that the prices will rise once the land transaction permission zone regulations are lifted, which have kept it bundled for so long," adding, "As the reconstruction projects are accelerating overall, the expectations are increasing."
Park Hapseo, an adjunct professor at Konkuk University's Graduate School of Real Estate, remarked, "Daecheong-dong possesses an irreplaceable value as the largest academic district in the country," stating that "The city's rapid integrated planning and the easing of reconstruction regulations have garnered more attention, further elevating its profile." He further mentioned, "In the case of Raemian Daechi Palace, its rarity is highlighted as it is the most newly constructed large complex in the area."