Real Estate's "Unchallenged No. 1" Changes... Songpa Overtakes Gangnam [Real Estate A to Z]

Songpa-gu Home Purchase Funds Reach 7.0788 Trillion Won from January to August, Ranking First in Seoul
Gangnam-gu Led for the Past Five Years, but the Rankings Reversed This Year
2,875 Apartment Transactions, 1,000 More Than in Gangnam-gu

As homebuying demand poured into Songpa-gu, the district surpassed Gangnam-gu in the total value of home purchases for the first time since 2021, when data on annual home purchase funding plans began to be compiled for all of Seoul and all price ranges. This came as demand from buyers in their 30s and 40s looking to move to better homes concentrated in Songpa-gu, while transactions in Gangnam-gu plunged amid loan restrictions and tax burdens. Analysts say Songpa-gu is considered more accessible than Gangnam-gu in terms of both price and commuting convenience. The rankings are also shifting sharply, with home purchase funds flowing into other Seoul districts, including Gangdong-gu and Nowon-gu, surging as well.

An apartment complex in Songpa-gu, Seoul. Photo by Kang Jinhyeong.

An analysis of “Home Purchase Funding Plans as of the End of August,” obtained from the Ministry of Land, Infrastructure and Transport by Kim Jong-yang, a People Power Party lawmaker on the National Assembly’s Land, Infrastructure and Transport Committee, found that home purchases in Songpa-gu totaled 7.0788 trillion won from January through August this year. Songpa-gu accounted for 10% of the 71.1278 trillion won in home purchases across Seoul. Gangnam-gu ranked second, at 6.0878 trillion won.

Gangnam-gu had consistently ranked first in home purchase funds. Although it had fewer transactions than Songpa-gu, its large number of high-priced homes had given it a substantial lead in terms of funds flowing into the district. In 2021, the value of transactions in Gangnam-gu, at 6.2436 trillion won, exceeded Songpa-gu’s by 1.8292 trillion won; last year, the gap was 680.8 billion won.

The reversal in the value of home purchase funds this year was driven by a sharp rise in home prices in Songpa-gu. According to apartment sale contracts reported to the Ministry of Land, Infrastructure and Transport’s real transaction price disclosure system from January through August, excluding canceled contracts, the number of transactions in Gangnam-gu fell 37%, from 2,972 units last year to 1,860 this year, while in Songpa-gu it fell 20%, from 3,614 units to 2,875.

Over the same period, the average apartment transaction price in Gangnam-gu rose by just 10 million won, from 2.87 billion won to 2.88 billion won. The interpretation is that a market dominated by a small number of cash-rich buyers has emerged: transactions fell sharply amid loan restrictions and tax burdens, but prices did not decline. By contrast, the average transaction price in Songpa-gu rose 10.2%, or 190 million won, from 1.87 billion won last year to 2.06 billion won this year.

The difference between the average transaction prices in the two districts narrowed from 1 billion won to 820 million won. Songpa-gu moved ahead in home purchase funds because transactions there declined less than in Gangnam-gu and the average price of apartments sold also increased. In particular, in the price range of 1.5 billion won to less than 3 billion won, Songpa-gu had 1,308 households, 521 more than Gangnam-gu.

Buying demand was concentrated in large apartment complexes in Jamsil-dong and Garak-dong. A total of 629 units, or 21.9% of all apartment transactions in Songpa-gu, were sold in just five complexes: Ricenz (148 units), Helio City (139), Parkrio (131), Jamsil Els (117), and Trizium (94). Transactions in these complexes totaled 1.8378 trillion won, accounting for 31.1% of the total transaction value in Songpa-gu.

Actual transaction prices for 84-square-meter units in these complexes all set new highs this year. Jamsil Els in Jamsil-dong sold for 3.7 billion won in February this year (21st floor), up 200 million won from the 3.5 billion won recorded in October last year (21st floor). Ricenz sold for 3.695 billion won in July this year (15th floor), surpassing the 3.6 billion won recorded last year (20th floor).

Helio City in Garak-dong changed hands for 3.15 billion won in February this year (28th floor), up 75 million won from the 3.075 billion won recorded in November last year (20th floor). Parkrio in Sincheon-dong sold for 3.22 billion won in January this year (20th floor), after trading for 3.15 billion won in November last year (16th floor).

Details of funding sources showed particularly strong demand from buyers selling their current homes to move to more desirable areas. This year, the largest shares of home purchase funds in Songpa-gu came from proceeds from the sale of real estate and other sources (37%), deposits at financial institutions (17%), and loans from financial institutions (14%), in that order.

Experts say the influx of genuine homebuyers in their 30s and 40s, the main group driving home purchases, reflects the combination of a lower price barrier than in Gangnam-gu and convenient access to business districts.

Park Won-gap, senior real estate expert at KB Kookmin Bank, said, “As high-income dual-income couples in their 30s and 40s have emerged as the main group of buyers, they appear to be choosing Songpa-gu, where the barrier to entry is relatively lower, instead of Gangnam-gu, where prices are a major obstacle. Songpa-gu is attracting demand from the surrounding area because it is convenient for commuting not only to Gangnam and southern Seoul but also to southern Gyeonggi, including Pangyo.”

Park added, “In the past, Songpa-gu attracted a great deal of speculative capital, including into redevelopment projects, so during downturns, prices there fell earlier than in Gangnam and were more volatile. Recently, buyers seeking homes for their own residence have become established in completed redevelopment complexes, changing the district into a market driven by genuine demand, where prices do not fall much even during downturns.”

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