2024-01-14 23:08:22
Sanggye-dong, Nowon-gu, now known as ‘Yeongkkeul Holy Land’
The old main industrial complex fell by half.
“Even expectations of reconstruction cannot prevent prices from falling.”
Panoramic view of Sanggye Jugong Apartment in Nowon-gu, Seoul. Hankyung DB “Talking about reconstruction is of no use now. This is where the homeowner who bought it for 800 million won with a loan is selling it for 400 million won. However, since it is not selling, the owner who is paying back the loan will be upset.” (Representative of A real estate agent office in Sanggye-dong)
The price decline of old complexes in Sanggye-dong, Nowon-gu, Seoul, which were once crowded with young real estate buyers, is increasing. There was even a landlord who put his house on the market for half the purchase price. Although some expectations have increased due to the government’s easing of reconstruction regulations, the response is that the impact of the transaction cliff is greater. The reaction is that the backlog of listings has been accelerating since the new year, with not even urgent listings going on the market.
According to the Ministry of Land, Infrastructure and Transport’s actual transaction price disclosure system on the 15th, Sanggye Jugong Complex 5 (31㎡ only) in Sanggye-dong, Nowon-gu, Seoul, which was traded for more than 500 million won until October last year, is now being traded at around 400 million won, including being traded for 440 million won last month. The response on the spot is that if you want, you can find a property for sale even at a lower price.
An official at a real estate agency in Sanggye-dong said, “If you have the intention to buy, we can find a property for sale at a lower price,” and added, “There are cases where young homeowners are willing to put up even half the purchase price to repay the loan.”
The complex adjacent to Nowon Station on Seoul Subway Line 7 is considered a representative candidate for reconstruction in Nowon-gu. During the last real estate surge, young buyers flocked to the area and it was also called the so-called ‘Youngkkeul Holy Land.’ In August 2021, an exclusive 31㎡ unit was traded for 800 million won, raising expectations of a price increase. However, recently, prices have fallen to around 400 million won, and many homeowners are finding it difficult to repay the loan interest.
The situation is the same for other complexes in Sanggye-dong. Most of them are old, so expectations for reconstruction are high, but the price decline has recently increased sharply. In the past three months, Sanggye Jugong Complex 2 fell by 10.5%, Complex 12 by 11.3%, and Complex 5 by 10.3%, falling by more than double digits. 32㎡ exclusively for Sanggye Jugong Complex 2, which was traded for 560 million won in 2021, was recently traded for 385 million won. The 41㎡ unit exclusively for complex 14 also peaked at 639 million won in August 2021, but recently, you can also find listings in the low 300 million won range.
Through the January 10 Measures, the government announced a plan to relax reconstruction regulations, including allowing apartments built more than 30 years ago to be rebuilt without safety inspections. However, in the case of many old complexes in Sanggye-dong, the safety diagnosis process has already been completed and reconstruction is in full swing, making them excluded from the beneficiaries. Rather, the response is that the price decline is greater because expectations for reconstruction were high several years ago.
A real estate industry official said, “In the case of Nowon-gu, prices were rising due to expectations of reconstruction,” and “Now, with the financial burden of homeowners who took out loans at the time and the transaction cliff overlapping, prices are bound to fall regardless of the good news about reconstruction.”
Reporter Yoo Oh-sang [email protected]
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