Analysis of multi-family home deals by district

Gangseo-gu leads all 25 districts in share and volume

Seoul's average multi-family home price hits 430 million won as non-apartment prices climb

A row of multi-family homes in the Hwagok-dong area of Gangseo-gu, Seoul. (Yonhap)
A row of multi-family homes in the Hwagok-dong area of Gangseo-gu, Seoul. (Yonhap)

The Youth Future Bogeumjari Loan is a state-backed, low-interest mortgage program for young first-time buyers of non-apartment housing. Set to launch next January, it has drawn growing attention to multi-family homes in Seoul priced at 400 million won ($298,000) or less, which will qualify for the loan. Deals under 400 million won this year were notably concentrated in western Seoul, particularly in Gangseo-gu, Eunpyeong-gu and Yangcheon-gu. However, some in the industry expect the pool of such affordable properties to shrink, given that the recent rally in housing prices has begun spreading to multi-family homes as well.

Zigbang provided the market analysis to The Herald Business on Wednesday, covering multi-family home sales with an exclusive floor area of 85 square meters or less. A total of 26,815 such deals were recorded in Seoul between January and August this year. Of those, 16,421 — or 61.2 percent — were priced at 400 million won or less.

By district, deals under 400 million won were most numerous in Gangseo-gu, with 1,846 transactions. Sales at or below that price accounted for 93.9 percent of all multi-family home deals in the district.

Eunpyeong-gu (1,708 deals), Yangcheon-gu (1,173), Songpa-gu (1,054) and Gwanak-gu (1,040) followed Gangseo-gu, each recording more than 1,000 multi-family home sales priced at 400 million won or less. In both Eunpyeong-gu and Yangcheon-gu, more than 80 percent of multi-family home transactions fell under that threshold.

Dobong-gu (90.6 percent), Guro-gu (90 percent), Gangbuk-gu (88.1 percent) and Geumcheon-gu (87.6 percent) followed Gangseo-gu in the share of deals under 400 million won within each district. These are mostly outlying districts. In terms of price alone, these are the districts where young buyers seeking non-apartment housing under 400 million won are most likely to focus their search.

Yongsan-gu recorded the fewest multi-family home sales under 400 million won in Seoul. Over the past eight months, it was the only district citywide with fewer than 100 such transactions, at 44. Deals under 400 million won made up just 7.2 percent of all multi-family home transactions in Yongsan-gu. Gangnam-gu and Seocho-gu recorded 216 and 164 such deals, respectively.

Industry watchers, however, expect the share of deals under 400 million won to shrink as non-apartment housing prices continue climbing. The Korea Real Estate Board's July housing price survey showed Seoul's sale price index for multi-family housing, including multi-household homes, rose 5.27 percent from a year earlier. That is sharply up from 1.19 percent growth in the same month the previous year. Zigbang's analysis found that the average sale price of multi-family homes across Seoul in July already stood at 432.33 million won, surpassing the Youth Future Bogeumjari Loan's price threshold.

As a result, some expect buying interest to shift away from Seoul toward outlying areas. "Since Seoul multi-family home prices have already climbed considerably, if there is an area where exiting is easy — meaning you can resell and recover your money quickly — buying newly built housing in areas near transit hubs in Gyeonggi Province that are in demand, such as Gwangmyeong or Bundang, could be one alternative," said Ham Young-jin, head of Woori Bank's real estate research lab.

"One needs to decide whether they want newly built housing to live in themselves, or whether they want non-apartment housing for a move-in right at a redevelopment site," Ham said. "If targeting a redevelopment site, focus mainly on ones where the project has already progressed, such as those that have already received association establishment authorization. But since prices could rise while waiting for the new policy loan to be introduced, buying before the end of the year may be the better option, depending on the site."


hope@heraldcorp.com