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[Newsmaker] Home prices in Banpo poised to top W100m per ‘pyeong’

Nov. 26, 2021 - 15:19 By Kim Yon-se
A view shows apartment complexes in Seoul on Nov. 21. (Yonhap)
SEJONG -- Banpo-dong, Seoul, is likely to see the average trading price of homes exceed 100 million won ($83,800) per “pyeong” in the coming months. Apgujeong-dong, Seoul is poised to follow suit.

In the nation, a pyeong is a basic unit used for real estate prices, equal to 3.3 square meters.

These two districts in the capital’s Gangnam-gu, located just south of Han River, are the priciest in South Korea.

According to and KB Kookmin Bank, Banpo-dong’s home prices reached an all-time high of 97.91 million won per pyeong as of Nov. 19. The average trading price surged by 20 million won, or 25.7 percent, in only a year, from 77.84 million won on Nov. 20, 2020.

Given the increase by more than 5 million won in less than three months from 92.26 million won on Sept. 3, housing prices in the district are expected to top 100 million won as early as in the first quarter of 2022.

Apgujeong-dong also recorded a jump by 20 million won over the corresponding one year to post 92.79 million won on Nov. 19. The district could reach an average price of 100 million won by the first half of next year.

This 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.

But there are two factors that may curb price growth: the comprehensive real estate holding tax for 2021 and a recent hike in benchmark interest rate.

Heavier comprehensive real estate taxes, levied this year, may lead some of those owning two homes or more to sell. And the rising loan rates could pose a heavier burden on homebuyers via mortgages.

But some people predict that the two pricy areas, alongside others in Gangnam-gu and Seocho-gu, would be an exception.

“Banks are barred from issuing mortgages if home prices surpass 1.5 billion won under real estate regulations. So, cash-based trading among wealthy households in Gangnam would not be affected by interest rate hikes,” a real estate agent in Seoul said.

He forecasted that most home traders in Gangnam would expect eased rules on comprehensive real estate taxes in the next administration, which will take office in May.

By Kim Yon-se (