We would like to talk about housing market in Seoul. Many apartments in Seoul are very old, so Seoul Metropolitan Government decided to rebuild those old apartments in 2013. Since then, there has been a boom for the rebuilt apartments. With current Korean housing system, especially in Seoul, the owners of those old apartments can earn very good money if their apartments are to be reconstructed. That being the case, the owners of old apartments try not to sell their apartments even though their apartment is not in good condition to live. They expect that the price of their apartment will increase. And this increase in price will also influence housing market including rents.
One of the most expensive area in Seoul is Gangnam. Gangnam is divided into three districts, Gangnam district, Seocho district and Songpa district. Apartments price in those districts has been increasing for years because of the reconstruction boom. Many of real estate experts say that those three districts will have the largest increase in housing price. Besides the three districts, Yongsan district is expected to have the largest increase in housing price because some of new apartments will be ready for people to move-in. Yongsan district is one of expatriate areas in Seoul and many expats still prefer to live in Ichon, Itaewon and Hannam in Yongsan district. The reconstructed apartments in Yongsan district would also affect the rent price for expats.
Rent Price Affected
In 2015, an assignee from our client moved into a reconstructed apartment in Yongsan. The rent price of his apartment was KRW 5,000,000 per month. The apartment is in very good location, stores and public transportation are near the apartments. As the extension of lease agreement for his apartment is coming in this year, we surveyed the current market rent price of the apartment. The current market price is KRW 6,000,000 ~ KRW 6,500,000 per month. The increase in the rent is about 900 ~ 1,300 in USD.