"How Much Would You Have Made If You Had Bought a Home Last Chuseok?" Seoul Apartments' One-Year Report Card

[Financial News] "I should have just bought a home last Chuseok."
One topic certain to come up at family gatherings during Chuseok this year is home prices in Seoul. If someone had bought a Seoul apartment around last year's Chuseok, how much would its value have changed over the past year?
Looking at actual transactions of the standard 84-square-meter exclusive-use unit, rather than simple appreciation rates, makes the changes in Seoul's housing market over the past year even clearer. As the price gains spread beyond high-priced apartments in the Gangnam area to Seongdong, Gwangjin, Dongjak and Yeongdeungpo districts, asset values shifted by hundreds of millions of won in some areas within a year.
According to the Seoul Metropolitan Government and the Korea Real Estate Board (KREB) on the 25th, actual transaction prices for Seoul apartments rose 14.56% in July from the same month a year earlier. They also increased 1.93% from the previous month.
What stands out in particular is how the gains have spread. The market is showing a somewhat different pattern from the one seen recently, when only the Gangnam area was rising. In July, the year-on-year increase in actual transaction prices was highest in southwestern Seoul at 16.06%, while northeastern Seoul posted 15.91%. Central Seoul rose 13.85%, followed by northwestern Seoul at 13.32% and southeastern Seoul at 13.23%.
The gains feel even more pronounced at the individual-complex level. Actual transactions of 84-square-meter units in August and September this year show that Dogok Rexle in Gangnam-gu sold for 3.78 billion won, Raemian Gireum Centerpiece in Seongbuk District for 1.91 billion won, and Taereung Harrington Place in Nowon District for 1.445 billion won.
There are also signs that the center of gravity of Seoul's housing price gains is partly shifting from high-priced homes toward mid- and lower-priced areas.
The Seoul Metropolitan Government analyzed that actual transaction prices continued to rise as transactions at existing asking-price levels followed the sale of distressed listings in high-priced areas, while end-user demand flowed into mid- and lower-priced areas.
However, Seoul apartments should not be viewed as a single market. Even 84-square-meter units can vary widely in price depending on the area, complex, year of completion and whether redevelopment is planned. When transaction volumes have fallen, some record-high deals may not represent the overall price level of the area.
A real estate industry official analyzed the market, saying, "The recent market is less a rally in which all of Seoul is moving at the same pace than a rotation of buying demand toward relatively less expensive areas and favored complexes." The official added, "Even after Chuseok, it is important to look at transaction volumes and actual closing prices by area rather than simply the Seoul average."


[email protected] Kim Kyung-a Reporter