Redeveloped Seoul apartment prices soar 53% in four years
THE average sale price of real estate in redeveloped apartment complexes in Seoul has soared more than 50 per cent over the past four years, data showed on Monday.
According to data submitted by the state-run Korea Housing & Urban Guarantee Corporation to the parliamentary land committee, the average sale price for reconstructed apartments stood at 9.5 million won ($7,900) per square metre as of this year.
This latest figure was up 3.3 million won or 53 per cent from 2015. The average sale price per square metre during that period had mostly remained under the nine million won line but took a sudden upturn this year.
A l s o, t h e y e a r- o n - y e a r increase rate for this year was 28.23 per cent, the highest in four years, suggesting that the Moon Jae-in administration’s extensive real estate policies last year – known as the September 13 measures – has not had the intended effect on Seoul’s property market.
Marking the steepest rise was Dongdaemun-gu in eastern Seoul, which saw its average sale price for reconstructed apartments soar 71 per cent to 8.2 million won last year from 4.8 million won in 2017.
The city’s affluent Gangnamgu saw its figure rise 22 per cent over four years, to 14.5 million won per square metre last year from 11.8 million won in 2015.
Nowon-gu and Seongbuk-gu – northern districts where a high proportion of redevelopment residential complexes are located – logged 41 per cent and 59 per cent in respective increase rate during the same period.
“It is not easy to make an equal comparison [of prices] as there isn’t necessarily a case of reconstruction in every district every year,” said Representative Youn Kwan-suk of the ruling Democratic Party, member of the land committee.
The rapid rise in the apartment sale prices was attributable to the slack management of the state-run housing corporation, especially until the recent revision of price-setting rules, the lawmaker said.
The Ministry of Land, Infrastructure and Transport in June lowered the price ceiling regulations for redeveloped or reconstructed apartments, in an extended move to curb the bubble-prone residential real estate market here.
“In Seoul, the supply of new residential area has mostly been dependent on redevelopment and reconstruction [of old buildings], a process which has allowed market prices to rise,” Representative Youn said.
“[ The government] should come up with a supply plan which meets the demands of the non-homeowning population and also operate a coherent road map when it comes to price regulations.”