As the craze for "eoljugshin (freeze to death but new construction)" cools, prices for older apartments in Seoul are rising.
According to weekly apartment price trends for the first week of December released by the Korea Real Estate Board (REB) on the 9th, apartments "over 20 years" old in Seoul posted a 0.19% rise in sale prices, the highest among all age brackets. Newly built apartments "5 years or less" and "over 5 years to 10 years or less" saw price increases of 0.17% and 0.16%, respectively. Typically, apartments older than 10 years are categorized as older units. Among these, those "over 10 years to 15 years or less" and "over 15 years to 20 years or less," which are still far short of the 30-year threshold for redevelopment, had the lowest price gains at 0.11%.
The reversal in which price growth for apartments over 20 years old outpaces that of new units has continued for three weeks. In the third and fourth weeks of Nov., apartments over 20 years old rose 0.21% and 0.20%, exceeding the gains for units 5 years or less old (0.20%, 0.18%). This trend has strengthened in the second half. After the June 27 and Oct. 15 real estate measures were released, lending rules tightened, and with it hard to buy expensive new apartments, more buyers appear to have shifted strategy to "hometech," staying in older homes and holding out until redevelopment.
Ko Jun-seok, a professor at Yonsei University Sangnam Institute of Management, said, "Because of the burden from the surge in new apartment prices, demand has flocked to older apartments with redevelopment potential," and added, "This trend is likely to continue for the time being, pushing prices for older apartments up to levels close to new apartments."
The shrinking pipeline of new apartment supply is also having an impact. In Seoul, where securing new housing sites is difficult, there are virtually no supply options outside of redevelopment and other renewal projects. According to Real Estate R114, the number of apartments scheduled to be occupied in Seoul this year is 37,681 households, but it is expected to plunge to around 9,600 next year. In 2027, the year after next, it is projected to fall further to around 8,200. An official at a construction company said, "There is no real alternative other than new supply through renewal projects," and added, "With some easing of redevelopment regulations, demand will inevitably concentrate on older complexes that are superior and whose project feasibility is secured."