In Seoul's Mapo, Seongdong and Gangdong districts, record-high price transactions are continuing in the real estate market. After the government mentioned in the Sept. 7 measures the possibility of adding designations of land transaction permit zones (land permit zones), demand appears to be flocking to these areas to buy before the regulations take effect.
According to the local real estate industry on the 21st, the 59-square-meter exclusive unit at Godeok Gracium in Godeok-dong, Gangdong District, Seoul, changed hands for 1.9 billion won after the Sept. 7 measures, setting a new reported high.
A, who runs a licensed real estate agency in Sangil-dong, said, "After the June 27 measures, a high-intensity real estate loan regulation, customers dried up," but added, "This month, because the land permit zone has not yet been designated, the advantage that gap investment is possible by buying with a jeonse in place has led to a sharp increase in people wanting to buy."
Mapo Raemian Prugio in Ahyeon-dong, considered the flagship apartment complex of Mapo District, Seoul, reportedly wrote a new reported high of 2.475 billion won for an 84-square-meter exclusive unit on the 2nd, followed by another new reported high last week at 2.6 billion won.
B, the head of a licensed real estate agency in Ahyeon-dong, explained, "From early September, people who lack funds to buy an apartment in the three Gangnam districts are flocking to view homes, focusing on Mapo and Seongdong apartments," adding, "There are also buyers coming up from provincial regions who want to invest in landmark apartments in Mapo before additional regulations come out."
In Seongdong District, Seoul, too, record-high price transactions have been taking place one after another after the Sept. 7 measures. At E-Pyunhansesang Oksu Park Hills in Oksu-dong, a 59-square-meter exclusive unit recently renewed its reported high at 2.3 billion won, and an 84-square-meter exclusive unit at 2.6 billion won, respectively. At Brownstone in Geumho-dong 4-ga, an 84-square-meter exclusive unit also transacted at 1.7 billion won, setting a new reported high.
C, who runs a licensed real estate agency in Oksu-dong, said, "At E-Pyunhansesang Oksu Park Hills, the previous record high was 2.27 billion won, but after the Sept. 7 measures, inquiries to buy surged, and a move-in-ready listing sold immediately at 2.3 billion won," adding, "I thought tighter loan regulations would weaken buying sentiment, but after the Sept. 7 announcement, the idea that Seongdong District could be designated a land permit zone spread, and buying sentiment seems to have strengthened instead."
Earlier, the government announced the Sept. 7 measures, which include improving the system so that not only the relevant city and provincial governors but also the Minister of the Ministry of Land, Infrastructure and Transport can have the authority to designate land permit zones ex officio. If designated as a land permit zone, an owner-occupancy requirement applies, effectively making gap investment impossible.
Ko Jun-seok, a professor at Sangnam Institute of Management at Yonsei University Graduate School of Business, said, "This is the psychology of wanting to preempt apartments in key areas such as Mapo, Seongdong and Gangdong where gap investment is possible before a land permit zone designation," adding, "Recalling that prices actually rose when real estate regulations came one after another in the past, many people are engaging in gap investment or deciding to buy a home even if they move into their parents' place."
On the 17th, the Seoul Metropolitan Government extended for one year and three months the land transaction permit zones designated for all apartments (about 2,200 complexes) located in the three Gangnam districts (Gangnam, Seocho and Songpa) and Yongsan District. Mapo and Seongdong districts, which drew attention over possible additional designations, were not designated as land permit zones.