In the apartment market of the Gangnam 3 districts, including Gangnam, Seocho and Songpa in Seoul, low-priced listings are decreasing and sellers are holding firm on asking prices. As some quick-sale listings aimed at tax savings were absorbed ahead of the end of the capital gains tax surcharge deferral for multiple-home owners in May, lower-priced listings thinned out. However, with Hwaseong's Dongtan District in Gyeonggi Province designated as both a regulated area and a land transaction permit zone, a variable remains as to how much Dongtan-driven move-up demand will flow into the greater Gangnam area.
According to real estate platform Hogangnono on the 1st, listings for 84㎡ exclusive-use units at ACRO River Park in Banpo-dong, Seocho District, Seoul, are around 7 billion won. According to the publicly disclosed actual transaction system of the Ministry of Land, Infrastructure and Transport, the 84㎡B unit in this complex changed hands for 6.3 billion won on May 19, setting a new record high. The current asking price is about 700 million won higher than the previous record high.
Large units around the Hyundai Apartment complex in Apgujeong-dong, Gangnam District, are also maintaining high asking prices. Listings for 170–183㎡ exclusive-use units at Apgujeong Hyundai Apartment are set from the mid-8 billion won range. After a 183.41㎡ unit at Shin Hyundai 11th complex transacted for 9.4 billion won in mid-May, sellers of large units in the Apgujeong area have also been reluctant to cut prices.
Since the start of the year, some tax-saving listings appeared in the Gangnam 3 districts ahead of the end of the capital gains tax surcharge deferral for multiple-home owners. However, the mood shifted as low-priced listings decreased after May. In March and April, transactions centered on quick sales, but recently, while buyers wait for additional adjustments, there have been cases of sellers holding or raising asking prices again. Although transactions have not surged, in preferred complexes the trend is that higher-priced listings are coming out following high-priced transactions.
According to an analysis released by real estate data firm HomeDubu on Apr. 1, the absorption rate of quick-sale listings in the Gangnam 3 districts rose to more than 75–90% between March and April. In key complexes in Songpa District and Gangdong District, a significant portion of quick-sale listings that appeared ahead of the end of the capital gains tax surcharge deferral for multiple-home owners were transacted, the analysis found. During the same period, listings in core complexes in Gangnam District and Seocho District also declined after late March.
Price indicators also show the strength of the greater Gangnam area. According to the Korea Real Estate Board (REB) weekly apartment price trends, in the third week of June, Seoul apartment sale prices rose 0.27% from the previous week. During the same period, Gangnam District rose 0.31%, Songpa District 0.28%, and Seocho District 0.20%. All three Gangnam districts posted gains around the Seoul average, with prices in preferred areas proving resistant to declines.
The impact of rising home prices in southern Gyeonggi on higher-grade markets in Seoul is also a variable. According to the Korea Real Estate Board (REB), as of the fourth week of June, the cumulative apartment price increase rate this year in Hwaseong's Dongtan District was 11.38%, the highest among cities, counties and districts nationwide. Prices rose quickly as expectations for a semiconductor industrial belt overlapped with the benefits of improved transportation networks such as the GTX-A metropolitan express railway. During this process, some inquiries about moving up to the greater Gangnam area in Seoul also increased, on-the-ground brokerages said.
However, as the government designated Dongtan District as a regulated area, the pace of demand shifting may slow. The Ministry of Land, Infrastructure and Transport designated Hwaseong's Dongtan District, Yongin's Giheung District and Guri as speculative overheated districts and adjustment target areas starting July 1, and as land transaction permit zones starting July 5. As a result, loan, subscription and tax regulations are strengthened in these areas, and for transactions of dwellings above a certain size, proof of owner-occupation is required.
Nam Hyeok-woo of Woori Bank's Real Estate Research Institute said, "In the Gangnam 3 districts, more areas have recovered asking price levels from before March–April, when there were many quick sales by multiple-home owners, but buyer wait-and-see sentiment may continue due to policy uncertainties such as interest rates and the July tax reform plan," adding, "Dongtan-driven price strength has spurred some move-up demand in parts of Seoul such as Songpa and Gangdong, but after the regulated area designation, it is necessary to watch the speed and direction of demand shifts more closely."