Gangnam's three districts see home prices slide; Jamsil complex down W400m from peak [Real Estate 360]

Apartment prices in Seoul's Songpa-gu fell for the first time in about five months, following similar declines in Gangnam-gu and Seocho-gu. The downturn extends a monthslong correction across the three Gangnam districts since the government unveiled a tax overhaul targeting high-end homes and owners of a single non-resident-occupied property.

According to a weekly apartment price survey released Thursday by the Korea Real Estate Board, covering the first week of September as of Monday, Seoul's apartment prices rose 0.20 percent this week. That was a smaller gain than the previous week's 0.22 percent increase.

The slowdown was attributed to price declines across all three Gangnam districts. In Gangnam-gu, apartment prices fell 0.35 percent this week, a milder drop than the previous week's 0.41 percent decline. In Seocho-gu, the decline widened from 0.23 percent to 0.30 percent over the same period.

Songpa-gu, which had posted a 0.01 percent gain the previous week, swung to a 0.02 percent decline this week. It was the district's first drop in 21 weeks, since the second week of April, when prices also fell 0.01 percent. In the district's Jamsil area, where transaction prices are relatively high, distressed sales aimed at reducing tax burdens have driven down deal prices. The Ministry of Land, Infrastructure and Transport's real transaction price disclosure system shows recent transactions in the area. A 124-square-meter unit (exclusive use area) at the Recentz complex sold for 4.3 billion won ($3.21 million) on Aug. 21. That was down 400 million won from its record high of 4.7 billion won set in January. Nearby, an 84-square-meter unit at Jamsil Els Apartments sold for 3.41 billion won on Aug. 21, down 290 million won from its peak of 3.7 billion won.

Nam Hyuk-woo, a researcher at Woori Bank's Real Estate Research Institute, said, "The localized price correction, which started in the Han River belt areas of Apgujeong and Banpo within the two Gangnam districts, appears to be gradually spreading to other areas within those two districts." He added, "This week's price decline in Songpa-gu is presumed to stem from a belated adjustment of asking prices by some Songpa-gu apartment owners looking to move up into the two Gangnam districts."

In contrast, some districts with relatively low- to mid-priced housing — including Gangbuk-gu, Dobong-gu, Seodaemun-gu, Seongdong-gu, Jongno-gu and Jung-gu — saw their price gains widen from the previous week. Gangbuk-gu posted the highest increase in Seoul this week at 0.46 percent, and all 22 districts outside the three Gangnam districts recorded price gains from the previous week.

Nam said, "Mid-tier areas of Seoul — Gangseo-gu, Seongbuk-gu, Dongdaemun-gu and Seodaemun-gu — have posted strong, double-digit price gains, showing a solid price trend." He added, "While tighter lending conditions have slowed transactions, a shortage of listings for sale as well as for jeonse and monthly rent has kept declines in asking prices very limited."