The apartments in the Daechi-dong area of Gangnam, known as 'School District No. 1,' have been reported to be setting new record prices one after another. Currently, this area is designated as a land transaction permit zone, but it has been identified that prices have soared as the Seoul city government is known to be reviewing its release.
According to the Seoul Real Estate Information Plaza on the 28th, the 'Raemian Daechi Palace' in Daechi-dong recorded a transaction price of 4.38 billion won ($43.8 million) for a 94㎡ unit on the 9th of this month. This apartment complex, completed in 2015, consists of 1,278 units. Although it has been nearly 10 years since its completion, there are many older complexes in Daechi-dong, making this complex relatively preferred. Also, a larger unit of 114㎡ in this apartment recorded a record price of 5.2 billion won ($52 million) on the 9th of last month, while an 84㎡ unit marked a historical high of 3.93 billion won ($39.3 million) on the 23rd of last month.
The 'Eunma Apartment,' regarded as a 'big catch' for redevelopment in Daechi-dong, also set record prices for both unit types last month. An 84㎡ unit was transacted for 2.95 billion won ($29.5 million) on the 25th of last month, followed by a 76㎡ unit that recorded 2.725 billion won ($27.25 million) the day after, on the 26th. This apartment was completed 46 years ago and only last year, after more than 20 years of pushing for redevelopment, received approval for the establishment of the association. The Eunma Apartment Redevelopment Maintenance Project Association is preparing to apply for a rapid integrated planning request to the Seoul city government by the end of January next year.
The 'Daechi Mido,' selected as a target site for rapid integrated planning in 2021, is also recording multiple new high prices across various unit types. An 84㎡ unit was sold for 3.32 billion won ($33.2 million) on the 28th of October, setting a record price. Additionally, a 128㎡ unit sold for 4.2 billion won ($42 million) on the 31st of the same month, and a 159㎡ unit recorded a new high of 4.3 billion won ($43 million) on the 20th of the same month. The largest unit, 161㎡, also reached a record price of 4.5 billion won ($45 million) on the 7th of August.
Daechi-dong has been designated as a land transaction permit zone by the Seoul city government since June 2020. The land transaction permit system was implemented to prevent speculation, and for dwellings, a two-year requirement for actual residence is imposed. It is not possible to engage in 'gap investment' using jeonse (Korean lease system). The Seoul city government designated Daechi-dong, as well as areas like Samseong-dong and Cheongdam-dong, totaling 14.4 square kilometers, as land transaction permit zones for the development of the International Exchange Complex (GBC) around COEX in Samseong-dong.
However, as the Seoul city government recently reviewed the lifting and reduction of the land transaction permit zone, it has been identified that prices in the Daechi-dong area have soared. Since July, the city has been conducting a service related to the land transaction permit system and preparing guidelines for lifting and reducing the zones. At a related forum hosted by the city on the 19th, the possibility of managing land transaction permit zones by subdividing them into 'administrative districts' instead of 'legal districts' was discussed.
Additionally, it has been analyzed that the widening price gap between the Gangnam area of Seoul and the outskirts of Seoul, following the state of emergency after the impeachment situation, is also related. According to the Korea Real Estate Board, the apartment selling price in Seoul recorded a 0.01% increase compared to the previous week in the fourth week of this month, showing a slight upward trend. However, a detailed examination reveals that while the prices in the outer districts of Seoul, including 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%), have turned to a downward trend, the apartment prices in major areas of Seoul, such as Seocho-gu (0.06%), Songpa-gu (0.04%), Gangnam-gu (0.03%), and Yongsan-gu (0.03%), continue to rise.
A representative from a real estate agency in Daechi-dong noted, 'There has always been an expectation that prices would rise once the land transaction permit zone regulations were lifted.' They added, 'The overall progress of redevelopment projects is adding to this expectation.'
Park Habsu, an adjunct professor at the Konkuk University Graduate School of Real Estate, remarked, 'Daechi-dong has an irreplaceable value as the largest educational district in the country.' He noted that 'the Seoul city government's rapid integrated planning and relaxation of redevelopment regulations have received attention, making it more desirable.' He further stated, 'In the case of Raemian Daechi Palace, its rarity lies in being the newest large-scale complex in the area.'