A penthouse in Songdo International City in Incheon changed hands for 5.95 billion won. It is the first time an apartment transaction in Incheon has exceeded 5 billion won. However, real estate experts said the deal should be read not as a signal of rising home prices in Songdo but as a case reflecting the scarcity of ultra-high-end penthouses.
According to the Ministry of Land, Infrastructure and Transport's actual transaction price disclosure system on the 3rd, a 291.33 square meter unit at "The Sharp Central Park II" in Songdo-dong, Yeonsu-gu, Incheon, was transacted for 5.95 billion won on the 25th of last month. Both the buyer and the seller are individuals. The ownership transfer registration has not yet been completed.
This transaction is the highest among actual apartment transactions in Incheon. The previous record high for the same size was 4.5 billion won in Sept. 2021. The property changed hands at a price 1.45 billion won higher in about four years.
The Sharp Central Park II is a mixed-use complex with residential and commercial facilities built by POSCO E&C in 2011, with towers up to 48 stories. There are only six penthouses of 291 square meters. The asking prices for listings of the same size currently on the market are around 6.2 billion won.
In the market, the prevailing view is that it is difficult to see this transaction as a sign of a broad recovery in the Songdo real estate market. That is because the dwelling traded is an ultra-high-end penthouse supplied in very small numbers, unlike ordinary apartments.
The international business district where the complex is located is one of Songdo's most preferred residential areas, equipped with international schools, office facilities and Central Park. For this reason, it is known to consistently attract interest not only from local asset holders but also from high-net-worth individuals across the Seoul metropolitan area.
Nam Hyeok-woo of Woori Bank's Real Estate Research Institute said, "This transaction should be viewed through the lens of the penthouse's particularity," adding, "The penthouse market can set a price if even one asset holder takes a liking to it, so it is hard to interpret this as representing the overall mood of the Songdo real estate market."
In reality, Songdo's market shows a clear divergence by complex. While signs of recovery are emerging in the recent presales market and some newly built complexes, a considerable number of complexes still fall short of their past peaks.
Despite controversy over high presale prices, "The Sharp Songdo Grandeur," supplied in Songdo-dong by POSCO E&C, recorded an average competition rate of 17.7 to 1 for first-priority subscriptions. The 98 square meter units at "The Sharp Songdo Arc Bay," which welcomed residents last year, set a new record high when one transacted for 1.37 billion won last month.
By contrast, a 116.31 square meter unit at "Songdo The Sharp Harbour View" changed hands for 1.155 billion won last month, or 88.8% of its record high. A 115.67 square meter unit at "Songdo The Sharp Green Walk III" also transacted for 1.13 billion won, or 80.7% of its record high.
Experts say it is still early to judge the direction of the Songdo market. That is because Incheon's real estate market is still influenced by substitution demand following rising home prices in Seoul, and the volume of listings and move-ins in the area is not small.
Kim Hyo-seon, senior real estate expert at KB Kookmin Bank, said, "Songdo is a region with a clearly defined layer of preferred demand, but it is difficult to conclude that the entire market has entered a recovery phase," adding, "That said, for buyers looking to live in the property, the current market conditions are worth actively reviewing."