Demand Shifts to 2 Billion Won Range Amid Gangnam Fire Sales... "Focus on 1.5 to 2 Billion Won Segment"

As fire sales with prices hundreds of millions of won lower than previous peaks emerge in the Gangnam Area apartment market, the 2 billion won range and the 1.5 to 2 billion won segment in Seoul are emerging as key market variables. This pattern shows price adjustments in the Gangnam Area due to tax reforms and the resulting shift in demand.

Asking Prices in Gangnam Area Fall Due to Tax Reform Impact... "Volume for Realizing Profits"

Recently, in the Gangnam Area real estate market, listings have appeared with prices significantly lower than previous record highs. According to a KB Real Estate TV video, in the case of ACRO RIVER PARK, the current asking price has dropped to around 5.3 to 5.4 billion won from the previous record high of approximately 6.3 billion won, a decrease of about 900 million won. Similarly, for MA Apartment, the actual transaction asking price has dropped to the 3.1 billion won range compared to the record high of 3.6 billion won.

This phenomenon is analyzed to be heavily influenced by tax reforms. CEO Song Seung-hyeon explained, "The Gangnam Area is very sensitive to taxes and policies. It is the result of demand holders, who intended to maximize gains using the special deduction for long-term holding, deciding that it is advantageous to sell now considering the tax caps that will be applied in the future." In other words, tax reform is producing a policy effect that induces the sale of high-priced housing in the Gangnam Area, and it is forecasted that an increase in listings and price drops may continue for the time being.

However, he maintains a cautious stance regarding the sustainability of the decline. Since the buyer group in the Gangnam Area consists of demand holders with sufficient financial capacity, there is a structural characteristic where buying interest flows back in when price adjustments occur, making it difficult for the decline to be prolonged. CEO Song added, "I do not think Gangnam Area apartments cannot rise. If the structure is such that people with capital continuously enter during the process of changing hands, house prices have no choice but to rise."

Nearly 60% of 2 Billion Won Apartments Hit Record Highs... "The Housing Ladder Segment"

In contrast to the price adjustment in the Gangnam Area, other regions in Seoul, especially the 2 billion won segment, show a clear upward trend. CEO Song stated, "About 50 to 60% of all apartments in the 1 billion to 2 billion won segment are recording record highs." Representative areas include complexes in the 2 billion won range, including Helio City in Songpa-gu, and 2 billion won apartments in the Mapo Area, which are enjoying high popularity.

The background of this concentration of demand is the 'housing ladder.' High-end demand holders try to move to segments with lower tax burdens, while low-end demand holders attempt to move to higher-tier areas using loans. CEO Song diagnosed, "When selling an existing house and utilizing loans within the loan cap, the appropriate line to climb a high ladder is the segment around 2 billion won."

In particular, movements from an investment perspective are also being captured. Citing data that approximately 92% of stock and bond investors purchased housing in Seoul and the metropolitan area, he explained that those with strong investment tendencies tend to preemptively occupy the volatile Gangnam, Seocho, and Songpa areas. Meanwhile, areas in the 1 billion won range, such as Geumcheon District and Guro District, are seeing continuous demand, showing growth rates in the 10% range, which exceeds the Seoul average growth rate (6%).

The Segment to Watch for Growth Rates in the Next 2-3 Years is '1.5 to 2 Billion Won'

When forecasting the market trend for the next 2 to 3 years, he picked the 1.5 to 2 billion won segment as the one that will show the highest growth rate. This segment is mainly composed of 'moving demand'—those who sell existing assets to move—rather than first-time homebuyers. CEO Song analyzed, "People in their late 30s to early 40s, the class with the highest earned income, will look toward this segment. Since there is a tendency to jump far toward mid-tier areas or higher when moving once, this price range is promising."

Meanwhile, regarding the recent government announcement of the 'transfer of authority to district heads for small-scale maintenance projects of fewer than 500 households' policy, he acknowledged the positive effect in terms of speed but expressed concern. CEO Song pointed out, "While detailed administration at the district level is possible, if projects are split too excessively, it could damage the characteristics of the region and lead to unplanned development. Considering the aspects of infrastructure and public contribution brought by large-scale development, planning in a large framework is important." He particularly warned that if interests differ by district, the appearance of Seoul could manifest in a disconnected manner.

Finally, regarding the conflicts related to public rental housing occurring in places like the Cheolsan reconstruction in Gwangmyeong, he suggested, "Discord between members with different interests is inevitable at redevelopment sites. However, as the burden of costs is increasing due to rising construction costs, resolving conflicts early and proceeding with the project at a rapid pace will provide practical benefits to union members." He emphasized that if conflicts drag on, costs could ultimately increase further due to rising inflation and construction costs.