Pricey Gangnam apartments stand out as homeowners' safe haven

Apartment units in southern Seoul's Gangnam-gu stood out among housing options in South Korea’s capital city in October in terms of their valuation, as they are increasingly regarded as a safe haven in times of uncertainty in housing market regulation.

The estimate comes as multiple-home owners are struggling to keep multiple flats in their portfolio due to tougher housing regulations to stamp out the speculative buying.

The price gap between Gangnam-gu and adjacent districts in southeastern Seoul such as Songpa-gu and Seocho-gu is growing larger.

According to data from KB Real Estate Liiv On, the average transaction price of Gangnam-gu apartments for October came to 71.7 million won ($63,200) per pyeong, or 3.3 square meters. The gap between Gangnam-gu and Seocho-gu in terms of the average transaction price per pyeong reached a record-high 10.6 million won. The price gap nearly doubled in 3 1/2 years.

The gap between Gangnam-gu and Songpa-gu stood at 21.9 million won in October, rising over 40 percent in 3 1/2 years.

This comes as home buyers are scrambling to deal with a series of government measures to curb the housing price and speculative apartment purchases, as home buyers flocked to Seoul and the metropolitan area supported by high market liquidity in the pandemic era.

The measures have imposed loan restrictions on multiple-home owners and charged them with higher taxes for owning houses or transacting them. But frequent changes in the real estate regulation -- 23 since the beginning of the Moon Jae-in administration in 2017 -- puzzled home owners here, leaving their Gangnam-gu apartment as the last asset to sell if they owned one.

Coupled with the stance of home buyers, the upcoming introduction of the 105-story skyscraper Hyundai Global Business Center and the 630-meter underground transportation hub surrounding Samseong station are drawing anticipation from real estate investors. Also, Gangnam-gu district is home to prestigious schools, stirring demand from parents.

By Son Ji-hyoung (consnow@heraldcorp.com)