Home prices in South Korea seem to grow every year, in the coming months, Banpo-dong district in Seoul is expected to see the average trading price of homes exceed 100 million won ($83,800) per “pyeong”. While another area, Apgujeong-dong, Seoul is also expected to follow suit.
The above two districts in the capital’s Gangnam-gu, located just south of Han River, are reported to be the priciest in South Korea.
According to Naver.com and KB Kookmin Bank, as of Nov. 19, Banpo-dong’s home prices reached an all-time high of 97.91 million won per pyeong. The average trading price in only a year surged by 20 million won, or 25.7 percent, from 77.84 million won on Nov. 20, 2020.
In the first quarter of 2022, it is expected that housing prices in the district to top 100 million won, given the increase by over 5 million won in less than three months from 92.26 million won on Sept. 3.
Over the corresponding one year, Apgujeong-dong also recorded a jump by 20 million won to post 92.79 million won on Nov. 19. By the first half of next year, the district could reach an average price of 100 million won.
According to experts, such a rise in housing price indicates that an average 84-square-meter unit would cost 2.49 billion won in Banpo and 2.36 billion won in Apgujeong. When considering only apartments in high-rise complexes, prices for the same size are likely to range between 3.5 billion won and 4 billion won.
However, experts also suggested there are two factors that may curb price growth, the first being – comprehensive real estate holding tax for 2021 and second, a recent hike in benchmark interest rate.
With heavier comprehensive real estate taxes, levied this year, many owning two homes or more lead may sell off the same. While the rising loan rates could pose another liability on homebuyers via mortgages.
According to a real estate agent in Seoul, banks are barred from issuing mortgages if home prices surpass 1.5 billion won under real estate regulations. Hence, cash-based trading among wealthy households in Gangnam would not be affected by interest rate hikes.