In Mapo and Seongdong districts of Seoul, it has been reported that an average of three major apartments have been sold per day this year. Analysis suggests that buying activity started to pick up from the period of removing the land transaction permission zone and coincided with the 'balloon effect' following the reassignment.
According to the real estate big data platform Asil on the 17th, the 'Mapo Raemian Prugio' in Ahyun-dong, Mapo District, has recorded a total of 154 transactions so far this year until last month. This is a 50% increase compared to 108 transactions during the same period last year.
The transaction volume of the Mapo Raemian Prugio began to increase sharply from the period when the land transaction permission zone was lifted. The monthly transaction numbers are ▲10 in January ▲28 in February ▲51 in March ▲28 in April ▲37 in May. In May, three units in the 84㎡ exclusive area were sold at a reported high price. Three transactions were recorded at 2.25 billion won.
The Mapo Raemian Prugio is a large complex with 3,885 units that opened in September 2014. There are two elementary schools within walking distance, and it has good accessibility to the Mapo academy area.
The trend of 'Centras' in Sangwangsimni-dong, Seongdong District, is similar. A total of 137 transactions have occurred this year. This is a significant increase from just 56 transactions during the same period last year. The transaction volume has more than doubled in one year. The monthly transaction numbers for Centras are ▲7 in January ▲18 in February ▲51 in March ▲24 in April ▲37 in May. In May, a reported high price of 1.99 billion won was set for the 84㎡ exclusive area. This apartment complex, which opened in November 2016, has 2,529 units and also has an elementary school within walking distance.
Both apartments saw explosive transaction volumes in March, suggesting that the removal of the land transaction permission zone had a primary impact. It is interpreted that when the land transaction permission zone covering some areas of Gangnam was lifted for about a month, there was a chain movement to higher-priced lands, leading to an increase in transaction numbers for major apartments in Mapo and Seongdong.
The increase in transaction volume from May can be seen as a 'balloon effect.' Since March 24, when the city of Seoul expanded the land transaction permission zone to include parts of Gangnam and Yongsan, funds are flowing into areas that are easy for 'gap investors' and that have potential for price increases. The selling prices of apartments in Mapo and Seongdong are also soaring. According to the Korea Real Estate Board, in the second week of this month (as of the 9th), Seongdong and Mapo districts rose by 0.47% and 0.45%, respectively, far exceeding the average increase rate of Seoul at 0.26%.
Ham Young-jin, head of the real estate research lab at Woori Bank, noted, 'There is demand for upgrading in areas along the Han River outside the Gangnam area, and some individuals seem to be buying with jeonse while avoiding the land transaction permission zone regulations before prices go up. This may be considered a kind of balloon effect.'
Meanwhile, as apartment prices in the Seongdong and Mapo districts surged, the city of Seoul has mentioned the possibility of expanding the land transaction permission zone. Seoul Mayor Oh Se-hoon stated during a question session at the Seoul City Council on the 11th, 'Seongdong District is experiencing a slightly rapid increase in prices, and we are closely monitoring the situation,' adding, 'If the market reaches an emergency situation, we may use it.'