Will the clogged apartment transaction break through… ‘Nodo River’, which is driven by reconstruction, rebounds in 8 months
The Seoul apartment market, which has suffered from a severe trade cliff, is reviving. As apartment transactions turn to an increase for the first time in eight months, attention is focused on whether the recovery trend will continue. According to the Seoul Real Estate Information Plaza, there were 937 apartment sales transactions in Seoul in March, an increase of 16.4% from February (805 cases). Considering that the transaction report must be completed within 30 days of signing the contract, the total transaction volume in March is highly likely to exceed 1,000.
As of August of last year, the transaction volume of apartments in Seoul reached 4,064. However, after decreasing to 1,364 cases in November, the decline continued this year, but it has rebounded. By region, the so-called ‘Nodo River (Nowon, Dobong, Gangbuk-gu)’, such as Nowon and Dobong-gu, showed a marked increase. Nowon-gu increased from 55 cases in February to 87 cases in March, and Dobong-gu increased from 16 cases to 43 cases during the same period.
Considering that there are many old complexes that are under reconstruction in the Nodo River area, it is analyzed that this reflects the expectation of the new government to ease the reconstruction regulations. Expectations that various real estate regulations, such as heavy capital gains tax for multi-family owners, the excess profit recovery system, and loan regulations, would be lifted also had an impact. The trading volume has increased, and the selling price is also rising. According to the Korea Real Estate Agency, apartment sales prices in Gangnam-gu, Seoul have been on the rise since the third week (21st) of March rose by 0.01%. Songpa-gu also recorded an increase rate of 0.01% in the first week (4th) of April, ending the steady trend and turning to an upward trend.
For example, the 183m² dedicated to the 11th car in Apgujeong-dong, Gangnam-gu, Seoul recently traded at 5.95 billion won, recording a new record price by 750 million won from the previous high (5.2 billion won). The 129 m² dedicated to Banpo Acro River Park in Seocho-gu, the ‘Banpo Grand Master’, recently sold for 6.3 billion won, up 1.2 billion won from the previous high. The 139 square meter apartment in Yeouido, Yeongdeungpo-gu, Seoul also found its owner for 4.25 billion won, 200 million won higher than the previous transaction price.
Lim Byung-cheol, senior researcher at Real Estate R114, said, “Buying sentiment seems to be recovering with expectations for the easing of real estate regulations by the new government. “There are signs of an increase in house prices, such as breaking new records one after another in the Gangnam area of Seoul,” he analyzed. Although apartment transactions are reviving and prices are on an upward curve, it is difficult to see that the real estate market has entered a complete recovery trend. This is because the sale of goods for sale is the main one, and the number of goods for sale has increased. As jeonse for sale is on the decline, concerns are high in the rental market.
According to real estate big data company Asil, as of April 10, apartment sales in Seoul increased by 7.7% compared to a month ago. During the same period, the number of rental and monthly rentals for apartments in Seoul decreased by 16.9% and 16.7%, respectively. By region, the amount of rentals including cheonsei decreased by 24.4% in Songpa-gu alone, while Yeongdeungpo-gu (-23.4%), Seongbuk-gu (-23.3%), Dobong-gu (-21.6%), and Gangdong-gu (-21.4%) decreased significantly. It is analyzed that this is because the rental demand has increased as the winter vacation is over and the spring moving season has arrived.
There are also observations that commercial banks have stimulated the price of cheonsei by lowering the threshold for cheonsei loans. Boramae SK View exclusive 84㎡ in Singil-dong, Yeongdeungpo-gu, Seoul recently signed a charter contract for 1.3 billion won, up 300 million won from last October (1 billion won). An official from the real estate industry said, “Although apartment sales are increasing due to the new government’s expectation of easing real estate regulations, the variable is that the rental market is still unstable. It should be noted that the price of cheonsei is highly likely to soar two years before the enactment of the lease law in August,” he said.
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