Housing market in Seoul capital area revives

Jun 13, 2023, 08:32 am

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As the sale price of new apartments rises, the trading market in Seoul and surrounding areas is heating up. The image shows a panoramic view of Cheongnyang-ri Hanyang Sujain Graciel apartment complex in Dongdaemun-gu, Seoul./ Source: Hanyang

AsiaToday reporter Lee Ji-hoon 

The apartment sales trading market in Seoul and its surrounding areas is heating up. The volume of apartment sales rights in the Seoul metropolitan area in April more than tripled compared to April last year. As the housing subscription market is showing signs of recovery due to the government’s real estate deregulations and the trend of high sales prices continues due to soaring construction costs, demand to purchase homes with already set sales prices has increased. 

According to the Ministry of Land, Infrastructure and Transport’s actual transaction price disclosure system on Monday, the number of apartment sales rights transactions in Seoul and the metropolitan areas in April was 1,295, more than tripled from the same period last year with 384 cases. By region, the number of cases increased from 5 to 38 in Seoul, 113 to 506 in Incheon, and 266 to 751 in Gyeonggi.

Experts say that housing consumers are starting to purchase the sales right of major apartment complexes as the sale price is expected to rise due to increased construction costs following rising raw material prices and labor costs. According to the Housing and Urban Guarantee Corporation (HUG), the sale price of private apartments in April was 15,985,200 won per 3.3㎡, up 9.62% from the same month last year. In addition, the industry observers believe that a rise in the sale price is inevitable as the price of cement, one of the main materials for construction, is expected to rise due to the increase in electricity prices.

Besides, the government’s easing of real estate regulations helped the pre-sale housing market revive in the Seoul metropolitan area. The apartment complexes introduced in Yongin and Gwangmyeong recorded a high apartment subscription rate even though the 84㎡ pre-sale price exceeded 1 billion won. 

As the number of transactions on the right to sell is increasing, the premium to the sale price is also soaring in some apartment complexes. On May 3, the presale right of 84㎡ type for ‘Cheongnyang Station Hanyang Sujain Graciel’ in northeast Seoul was sold for 1.41 billion won (US$ 1.1 million), up more than 300 million won from the sale price. Last month, the 84㎡ type of ‘Heukseok River Park Xi’ in southwestern Seoul was sold at 1.18 billion won, up 200 million won from the sale price. 

While the market for presale rights in Seoul and its surrounding area is booming, some say that it will be difficult to increase transactions significantly. “The bill to abolish residential obligation is still pending in the National Assembly, and the transfer tax rate of presale rights is high, making it difficult to increase transactions,” said Kim Woong-sik, a researcher at Real Today Research.

#housing market #Seoul 
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