Seoul New Apartment Sale Prices Double in 5 Years Through Redevelopment, While General Sale Proportion Declines

Assemblyman Jang Jongtae Analyzes HUG Urban Renewal Project Guarantee Data

Planned Sale Price Per 3.3㎡ Surges From 31.3 Million to 52.9 Million Won

Proportion of General Sale Units Drops From 30% to 22%

The sale price of new apartments supplied through reconstruction, redevelopment, and other urban renewal projects in Seoul has nearly doubled over the past five years. In contrast, the proportion of units offered for general sale among the total supply is on the decline. Given that Seoul has almost no vacant land, most housing is supplied through such urban renewal projects, and the rising sales prices are interpreted as driving up overall housing prices in the city.

According to an analysis by Assemblyman Jang Jong-tae of the Land, Infrastructure and Transport Committee in the National Assembly, based on data submitted by the Housing and Urban Guarantee Corporation (HUG), the average planned sale price per 3.3 square meters at 16 urban renewal project sites in Seoul from the beginning of this year through the end of last month reached 52.9 million won. In 2021, the average sale price at 10 project sites was approximately 31.3 million won, marking a 1.7-fold increase.

A view of the reconstruction site of an apartment in Seocho-gu, Seoul. Photo by Yonhap News Agency

When comparing median prices instead of averages, the figure rose from 27 million won in 2021 to 50.5 million won this year — an increase of about 1.9 times. By year, in 2022, when there were only four project sites, the average planned sale price was 26.5 million won, but after surpassing 50 million won for the first time last year, prices continued to climb this year.

HUG is able to track planned sale prices for major urban renewal projects through association business loan guarantees. The numbers cited reflect the prices submitted by unions at the time of HUG’s guarantee review, and the actual sales price is expected to rise further as additional construction and financing costs are reflected.

Even excluding the three Gangnam districts — Gangnam, Seocho, and Songpa — where price caps apply, the average planned sale price rose from 25.5 million won to 42.5 million won over the same period, showing a 1.8-fold increase. At one project in Seocho-gu sold last year, the planned sale price per 3.3 square meters reached 101 million won. This year, Seocho-gu again saw a project with a planned sale price exceeding 95 million won per 3.3 square meters. In Dongjak-gu, where the price cap does not apply, there are projects selling at 77 million won per 3.3 square meters.

As sale prices have surged, the proportion of general sale units has declined. In 2021, out of 8,129 total units, 2,401 were for general sale, accounting for 30 percent. This year, of the 19,962 units, only 4,361 — or about 22 percent — were general sale units. The proportion of general sale units fell to 38 percent in 2023, 32 percent the following year, and 24 percent last year, marking a three-year continuous decline through this year.

There were also four projects with no general sale units at all. Normally, in urban renewal projects, units are distributed to union members, supplied as rental housing through public contributions, and released for general sale. At one project in Gangdong-gu that applied for a guarantee review in June this year, only 60 out of 1,164 union member units were offered for general sale. In one Seocho-gu project, only 10 out of 386 units were available for general sale.

Assemblyman Jang stated, "The Seoul Metropolitan Government has highlighted the acceleration of urban renewal projects and increased supply as key achievements for stabilizing housing, but although sale prices are rising quickly, the proportion of general sale units is shrinking. It is necessary to examine how much the expansion of supply through urban renewal actually leads to housing stability for actual end-users without homes."

This content was produced with the assistance of AI translation services.