A rebound for real estate starts
Prices finally start to rise after 35-week slump, even for high-end apartments
‘Demand for apartments where trading had stalled began to rise starting last month.’
Apartment prices in Seoul are finally on the rebound.
According to Kookmin Bank, apartment prices in Seoul posted a rise of 0.02 percent last week from a week earlier, showing an upward trend for the first time in 35 weeks. Prices in the greater metropolitan area stayed the same last week, stopping a 36-week decline.
The rise in prices was primarily driven by [[price?]] hikes in apartments located in areas that suffered from big drops, including the Gangnam and Gangdong Districts as well as Mok-dong in Yangcheon District.
Prices in the Gangdong District saw a week-on-week rise of 0.18 percent last week while Seocho and Songpa posted a rise of 0.14 percent and 0.09 percent, respectively, from a week earlier. Gangnam and Gangdong Districts witnessed a significant price increase, especially for apartment complexes undergoing reconstruction.
Bundang, one of the “bubble seven” regions in the metropolitan area, posted a 0.11 percent rise in prices last week. “Bubble seven” refers to seven regions designated by the government in 2006 as places with asset bubbles.
“People who had been putting off purchasing their own houses for a while have started to show strong demand again because they decided that the housing market has hit bottom,” explained Kim Ho-chul, a real estate professor in Dankook University, adding that it is still too early to say that housing prices are demonstrating an uptick since trading is mostly on apartments priced for quick sale.
Meanwhile, the luxury housing market, which includes houses that cost more than 2 billion won ($1.8 million), is showing recovery in Seoul and the metropolitan area.
Earlier this month, a 134-square-meter apartment in the Dogok Rexle complex in the Gangnam District sold for 2.1 billion won.
Also early this month, a 145-square-meter apartment in the Dongbu Centreville complex in Daichi-dong, Gangnam District, which was trading at 1.91 billion won last month, was sold at 2.16 billion won.
“Demand for high-priced apartments, whose trading had stalled, began to rise starting last month,” said a real estate agent.
The rise in demand for luxury housing comes from growing expectations of a recovery in the economy and the property market.
“Only about a month ago, homeowners were anxious about having no demand for houses, but now, sales are being made at prices homeowners’ asking prices since there are not enough houses on the market,” explained Yoo Sung-chul, chief executive of Luxurynhouse, a local real estate agency.
By Han Jong-sun, Park Il-han [firstname.lastname@example.org]