Property investors eye reconstruction apartment complexes in Seoul

A panoramic view of the apartment complex in Apgujeong area. [Photo by Park Hyung-ki]

Reconstruction apartment complexes in Seoul have led transactions of high-priced apartments valued over 5 billion won ($3.7 million) this year, a study showed Friday.

According to an analysis by Maeil Business Newspaper, 31 out of 79 high-priced apartment transactions belonged to complexes involved in reconstruction projects this year.

The analysis showed that 27 transactions were from the reconstruction districts 1~4 in Apgujeong-dong in southern Seoul, including the old and new Hyundai Apartments and Hanyang Apartment.

“Landlords are not willing to sell their properties, so the same area apartment is often sold in a span of few years,” said a realtor in Apgujeong-dong. “There is a lot of pending demand while properties are scarce, so the asking price has practically become the selling price.”

Banpo Jugong Apartment Complex 1 in Seocho District in southern Seoul also saw three transactions worth more than 5 billion won and The Hangang Mansion in Yongsan District one transaction.

Amid growing interest in high-end apartments, the number of high-end transactions this year is soon expected to surpass that of last year.

Last year, there were 95 transactions worth more than 5 billion won in Seoul. The number has already reached 79 as of August this year.

“Major global cities are also experiencing rising demand for apartments with high-end quality in good locations,” said Ko Jong-wan, head of the Real Estate Asset Management. “The price per square meter of apartments in Seoul’s core areas such as Gangnam is not yet comparable to those of other global cities.”

Ko added that if the economy recovers and housing prices go in sync with other global cities, the price of an apartment of 84 square meters could easily exceed 5 billion won.