Impact of Reduced Supply on New Developments in Seoul’s Gangnam Area
In February, the average pre-sale price of apartments nationwide exceeded 30 million won per 3.3 square meters, according to a report by Kwon Hye-jin of Yonhap News.
Data from Real Estate R114 indicate that last month, the average apartment pre-sale price nationwide was 31.2 million won per 3.3 square meters. This marks the first time the average price has surpassed 30 million won, exceeding the previous high of 24.74 million won recorded in August of the previous year by over 6 million won.
The rise in average pre-sale prices last month is attributed to a significant reduction in total supply nationwide, coupled with new high-priced developments in Seoul’s Gangnam area. Nationwide, there were only 1,631 housing units available for general sale, including the “Raemian One Perla” in Seocho-gu’s Bangbae-dong. Despite price caps, the pre-sale price for an 84㎡ unit in One Perla ranged from 2.2 to 2.4 billion won.
By city, Seoul recorded the highest average pre-sale price at 69.41 million won per 3.3 square meters, the highest level seen in 13 months since January last year (96.08 million won). This was followed by Busan (24.09 million won) and Daegu (23.99 million won). Daejeon (16.64 million won) and Ulsan (15.51 million won) both re-entered the top five after a three-month absence thanks to new apartment launches.
Gyeonggi Province, which supplied one complex each in Bucheon and Yangju, saw a significant decline to 15.11 million won, nearly 10 million won below the previous month’s price (24.96 million won). Meanwhile, there were no developments in 10 regions, including Gangwon, Gyeongnam, Gyeongbuk, Sejong, Incheon, Jeonnam, Jeonbuk, Jeju, Chungnam, and Chungbuk.
An industry insider commented, “The nationwide average pre-sale price fluctuates based on whether there are developments in Seoul. However, looking at the long term, apartment pre-sale prices are expected to continue rising this year. Recently, the Ministry of Land, Infrastructure, and Transport announced an increase in basic construction costs for price-capped apartments, indicating that rising indirect construction and labor costs will make price increases inevitable.”