Sale prices for newly built apartments in Seoul are soaring. Not only in the three Gangnam districts (Gangnam, Seocho, Songpa) but also in the Han River belt, complexes are increasingly setting sale prices at around 80 million won per 3.3 square meters (pyeong). Quite a few complexes are pricing 84-square-meter units—considered the national standard size—in the 2 billion won range. With the price cap on pre-sales not applied, and a mix of supply shortages, rising construction costs, and expectations for home price gains, sale prices appear to be continuing their upward climb.
According to the sales industry on the 31st, the Norangjin District 6 redevelopment project in Dongjak District, Seoul, Laklache Zaid Fine, is expected to be priced at about 78 million won per 3.3 square meters (pyeong). This is the market's expected sale price, with the average prices for general sales projected at 2,079.63 million–2,144.86 million won for 59 square meters, 2,422.29 million–2,509.41 million won for 84 square meters, and 2,933.49 million won for 106 square meters.
Laklache Zaid Fine is an apartment complex built by a consortium of GS Engineering & Construction and SK ecoplant, consisting of 14 buildings with 1,499 units (369 for general sale) from four basement levels to 27 above-ground floors. As the first complex in the 9,000-unit Norangjin New Town to go on general sale, it is expected to set the benchmark for prices of newly built apartments in the area. The tenant recruitment notice is scheduled for Apr. 3.
Heukseok Summit The Hill, the redevelopment project for Heukseok District 11 in Dongjak District, Seoul, is also expected to be priced in the mid-85 million won per 3.3 square meters range. According to the association's anticipated pricing, the sale price for 59 square meters will range by type from 2,048.63 million to 2,189.80 million won. The sale price for 84 square meters is expected to be around 2,826.68 million–2,837.47 million won.
Heukseok Summit The Hill, slated for sale in April, is supplied by Daewoo Engineering & Construction, with five basement levels to 16 above-ground floors, 30 buildings, and 1,515 units (420 for general sale). The complex is adjacent to Banpo, and nearby apartment listings are in the low-3 billion won range for 84 square meters, which appears to have pushed up the sale price.
These sale prices are higher than those for newly built apartments in the greater Gangnam area. In the three Gangnam districts and Yongsan District, the price cap on pre-sales applies, limiting price increases. ACRO de Seocho, to be supplied in Seocho District, is subject to the price cap, and has been set at a relatively lower price of about 78 million won per 3.3 square meters compared with nearby complexes.
ACRO de Seocho will consist of 16 apartment buildings from four basement levels to 39 above-ground floors, totaling 1,161 units with exclusive areas of 59–170 square meters. The general sale allocation includes 56 units of 59 square meters. The sale price for 59 square meters is in the 1,860 million won range.
The sharp rise in prices outside the three Gangnam districts is interpreted as the combined result of the nonapplication of the price cap, a shortage of supply within Seoul, and higher construction costs. Kim Hyo-seon, chief real estate expert at KB Kookmin Bank, said, "In the case of the three Gangnam districts, the price cap has made prices similar to other areas," adding, "Even in districts slated for sale this year, such as Gangseo District, the sale price per 3.3 square meters typically reaches the 70 million won range."
Nam Hyuk-woo of Woori Bank's Real Estate Research Institute said, "Project costs have risen in step with higher financing costs due to interest rate hikes, and increases in construction costs have been compounded by higher raw material prices," adding, "As prices of existing apartments have also climbed, even if sale prices are high, the new-build premium means they are not entirely unreasonable."
Despite the controversy over high pricing, competition for subscriptions is expected to be intense depending on market prospects and location. Nam said, "Whether demand can accept high prices depends on the market's direction," adding, "If many people believe later they won't be able to buy at this price, demand will flow in and lift the average price across the market."