Prices Drop by 3.5 Billion Won After Record Highs... Why Gangnam Is Fading and Where Is Surging

1. Why Apgujeong Apartments Dropped 3.5 Billion Won
High-end apartments in Apgujeong-dong, Gangnam-gu, Seoul, have recently been selling for billions of won lower. In Apgujeong District 2, one complex hit a record high last December when its largest 183-square-meter unit sold for 12.8 billion won. However, entering this year, it traded for 10 billion won in July, and then sold for 9.3 billion won this month. That is a drop of 3.5 billion won from its peak. An adjacent complex also sold for 11.25 billion won last July, but traded for 10 billion won in September and 8.8 billion won this month. These consecutive transactions at multi-billion-won discounts are analyzed to be due to regulations prohibiting home sales once redevelopment accelerates. For District 2, which has the fastest redevelopment pace in Apgujeong, the project implementation plan approval is scheduled to be applied for around early next month. Under the law, redevelopment complexes in speculative overheated districts are virtually barred from selling homes after applying for project implementation plan approval, with very few exceptions.

[Park In-gu / Apgujeong Real Estate Agent: Once you apply for project implementation plan approval, the transfer of union member status is restricted in principle. So it seems some properties came out as quick sales to sell ahead of that time.]

2. How Much Impact Do Tax Revisions Have on House Prices?
This was compounded by the impact of the government's tax revision plan announced on August 3. The government is pushing to significantly increase the comprehensive real estate holding tax burden on ultra-high-end homes while limiting the long-term holding special deduction ceiling to 1 billion won for capital gains tax incurred when selling a house.

[Apgujeong Apartment Union Member: Since the average age is over 60, cash flow is low, but the comprehensive real estate holding tax seems likely to go up about 3 to 4 times.]

Following the August 3 tax revision announcement, the Gangnam area has shown a clear downward trend. Because taxes are expected to rise significantly, quite a few owners want to sell, but buyers face loan blockages, meaning only a few cash-rich individuals can absorb high-end apartment properties in Gangnam. The "Gangnam 3" districts have been on a decline for nine consecutive weeks. As of October 26, weekly apartment sales prices dropped in the 0.3% range for Gangnam and Seocho, and in the 0.2% range for Songpa. However, all other areas in Seoul excluding the Gangnam 3 districts continue to rise. Seoul as a whole rose by 0.09% over the week.

3. "Shuttle-Station" Areas and the Rise of Outlying Regions
Recently, outlying areas of Seoul have been rising, with Seongbuk-gu up 0.39%, Seodaemun-gu up 0.36%, and Gangbuk-gu and Dobong-gu up 0.32% each. Also, in the southern Gyeonggi region, the semiconductor belt near Samsung Electronics and SK Hynix and so-called shuttle-station areas accessible by shuttle bus, the upward trend remains fierce in the latter half of this year. Dongtan, Hwaseong saw sales prices surge by a massive 21% this year, while Gwangmyeong rose 17%, Suwon Yeongtong 17%, and Guri and Hanam in the 13% range. These are much higher figures compared to the 8.7% rise in Seoul's overall housing prices this year.

4. The "Three-Way Division of Seoul"
To sum up, Seoul's housing market in the latter half of this year is largely divided into three paths. First, the Gangnam 3 districts continue their downward trend. The Han River belt areas excluding the Gangnam region—such as Dongjak, Seongdong, and Yeongdeungpo—have seen their upward momentum narrow slightly. Outlying areas referred to as "Nodogan" (Nowon, Dobong, Gangbuk) and "Geumgwan-gu" (Geumcheon, Gwanak, Guro) still display high growth rates. This is because government policies tend to divide directions based on sales price thresholds of 1.5 billion won and 3 billion won. Gangnam is declining, the rest of the Han River belt is taking a breather, and outlying areas are catching up. Much like the Three Kingdoms, it can be compared to a "Three-Way Division of Seoul." How long these directions will persist depends on changes in government policy or the impact of high interest rates, so we will need to keep a close watch.

(Reported by Jeon Hyeong-u | Produced by Shin Hee-suk | Video Reported by Park Hyun-chul | Video Edited by Seo Byeong-wook | Design by Lee Jeong-joo | Produced by SBS Digital News)
※ Please note: This article was translated by AI and may contain errors.