After the Aug. 3 tax overhaul was released, price trends in the Seoul apartment market have clearly diverged between Gangnam/Seocho and outlying areas. Gangnam District and Seocho District, where high-priced dwellings are concentrated, fell for a third straight week, while outlying districts such as Jungnang, Seongbuk, and Gangbuk jumped more than 0.5% in a week. As concerns grew that the tax burden on high-priced dwellings will increase, purchases in Gangnam subsided, and end-user demand appears to have shifted to large complexes near subway stations in the outskirts, where prices are relatively less burdensome.
According to weekly apartment price trends for the fourth week of August (as of the 24th) released by the Korea Real Estate Board (REB) on the 27th, Seoul apartment sale prices rose 0.29% from the previous week. The increase widened by 0.07 percentage points from the previous week's 0.22% rise.
Outlying areas led the gains. Jungnang District rose 0.56%, the highest increase among Seoul's 25 districts. Seongbuk District and Gangbuk District followed at 0.55% each, and Dobong District and Nowon District at 0.54% each.
Record-high-price transactions are continuing in Jungnang District. An 84-square-meter exclusive unit at 'Sagajeong Central I-Park' in Myeonmok-dong set a new high at 1.54 billion won on the 7th. That is up 215 million won from the 1.325 billion won transaction in January.
An 84-square-meter type C exclusive unit at 'DMC Central Xi' in Jeungsan-dong, Eunpyeong District also set a record high with a transaction at 1.91 billion won on the 4th. According to the brokerage industry on the 27th, the highest asking price for 84-square-meter exclusive units in this complex is 2.3 billion won.
An official at a certified real estate agency in Jeungsan-dong said, "After the record-high-price transaction, many homeowners raised their asking prices," and noted, "Inquiries to view homes are continuing even though prices have risen."
Asking prices for 84-square-meter exclusive units for sale at 'E-Pyunhansesang Sindorim Phase 4' in Sindorim-dong, Guro District are set at 2.05 billion to 2.15 billion won. An 84-square-meter exclusive unit at 'Raemian Gireum Centerpiece' in Gireum-dong, Seongbuk District, which transacted at 2 billion won last month, has come on the market with asking prices up to 2.2 billion won.
By contrast, apartment prices in Gangnam District and Seocho District fell 0.11% and 0.05%, respectively, declining for a third straight week. In Gangnam District, major complexes in Daechi-dong and Apgujeong-dong are listing at reduced prices, as are Jamwon-dong and Banpo-dong in Seocho District. However, Songpa District rose 0.09%, showing a difference even within the three Gangnam districts.
According to the brokerage industry, the minimum asking price for a 170-square-meter exclusive unit at 'Shinhyundai' in Apgujeong-dong, Gangnam District, which was a 9.3 billion won transaction last month, has fallen to 7.5 billion won. A 84-square-meter exclusive unit at 'Raemian Prestige' in Banpo-dong, Seocho District that recorded a 5.45 billion won transaction in June has come on the market at 4.44 billion won.
Experts see the wait-and-see mood in the high-priced dwellings market and rotational buying in outlying areas possibly continuing for the time being. Nam Hyeok-woo, a research fellow at Woori Bank, said, "End-user demand from one-person households without dwellings and newlyweds is steadily flowing in," and added, "With expanded lending supply in the financial sector and eased income requirements for the Bogeumjari loan, the movement to seek areas that have risen less will continue."
Kim Hyo-seon, chief real estate expert at KB Kookmin Bank, said, "Even if parts of the tax overhaul are supplemented, the broader direction of strengthening taxation on high-priced dwellings is likely to remain," and added, "In Gangnam, listings with lowered prices are likely to continue for the time being."