Real estate in South Korea
Encyclopedia
Housing costs in South Korea
have been moving downwards since 2007. An increase in unsold residential stock makes most analysts predict that prices will most probably not see substantial increases in the near future. Internet surveys in 2009 indicate that Seoul has one of the lowest gross rental yields in the world.
refers to three gus (wards) in southern part of Seoul, south of Han River
, which includes Gangnam-gu
, Seocho-gu
and Songpa-gu
. Gangnam district is famous for its expensive apartments. Apartment prices in Gangnam are the highest in South Korea, according to a Kookmin Bank
analysis on apartment prices in the seven areas where prices have soared. Songpa-gu
and Seocho-gu
come second and third respectively followed by Cheongdam-dong
, all in Seoul. Besides, many multinational corporations are located in the Gangnam area.
lies west of Seoul, in Yangcheon-gu
. Residents in this area are considered relatively affluent.
, it boasts fresh air and scenic beauty. Many citizens of Seoul consider the Pyeongchang-dong district in Jongno-gu
as one of the most wealthy neighborhoods. The area is lined with two- or three-story houses with a fairytale gable roof, a symbol of upscale homes in Korean society.
A hilly road leading to Bukak Park Hotel on Segumjung road, and Pyeongchang-dong is on the left, across the Olympia Hotel Seoul. The road is quiet and tranquil. A few cars are parked on the roadsides lined with houses and buildings. Newcomers, as well as those with an aesthetic sense for architecture, can easily feel a distinct atmosphere because of the calmness, artistic vibes, something which is missing from hectic city life.
s. The Itaewon
area, close to the Yongsan Garrison
of United States Forces Korea
, is dotted with apartments, villas and large houses with gardens.
is a large island within Seoul, and the center of Seoul's business district. Its 8.4 square kilometers are home to some 30,988 people. The island is located in the Yeongdeungpo-gu
district of Seoul, and largely corresponds to the precinct of Yeoui-dong. Lying on the south edge of the Han River, it contains the National Assembly of South Korea
, the Yoido Full Gospel Church
, and many office buildings including the 63 Building
and the headquarters of LG
, and other chaebol
.
is the southernmost district of Seongnam
, South Korea. It is considered to be the thriving, beating heart of modern day Seongnam. In the early 1990s, the Bundang area became a planned community as a response to alleviating the excessive demand for apartments in the similarly affluent, but much older Gangnam district
area. Many of Bundang's early residents actually hailed from the Gangnam area, thereby distinguishing Bundang as an affluent burrough in much the same manner as Gangnam. Before this period of expansion however, there was mostly farmland in this area. There are still a few farms in the Bundang area, particularly in the Pangyo
area. As the demand for more housing continues, Bundang is expected to continue expanding.
is the name of two districts (West and East) in Goyang
, Gyeonggi-do
. It is more organized and planned than the rest of the city, Goyang (Deogyang-gu), and its residents are generally more affluent. Ilsan is located northwest of Seoul. Like other satellite cities such as Bundang and Pyeongchon, Ilsan was planned in order to alleviate housing shortages in the city of Seoul. Ilsan has experienced phenomenal growth in the past 15 years, usually drawing in younger generations of upper middle-class Koreans.
is planned for alleviating the excessive demand for apartments in Gangnam and Bundang.
In Korea, there is a unique way of renting a house called Jeonse, in which a renter makes a lump-sum deposit on a rental space, instead of paying monthly rent, at anywhere from 50-100% of the market value, and gets back the whole deposit when the rent contract ends. The home-owner is free to invest the deposit as he or she wants, as long as the same amount of money is returned to the tenant at the end of the contract.
Since the Jeonse price reflects the actual demand of people who reside in the area, the gap between rental deposits for Jeonse and the apartment sales price means there might be a bubble
in the apartment price.
Depending on the area Jeonse prices can range as much as 25~80% of the home's sale price. The expensive Gangnam area's Jeonse is about 25~35% of the sales price because the properties are so expensive.
South Korea
The Republic of Korea , , is a sovereign state in East Asia, located on the southern portion of the Korean Peninsula. It is neighbored by the People's Republic of China to the west, Japan to the east, North Korea to the north, and the East China Sea and Republic of China to the south...
have been moving downwards since 2007. An increase in unsold residential stock makes most analysts predict that prices will most probably not see substantial increases in the near future. Internet surveys in 2009 indicate that Seoul has one of the lowest gross rental yields in the world.
Gangnam (강남)
GangnamGangnam
Gangnam or Kangnam is a Sino-Korean place name meaning "south of the river". It may refer to:*Gangnam-gu, local government district south of the Han River in Seoul, South Korea*Kangnam-gun, county of North Hwanghae, North Korea...
refers to three gus (wards) in southern part of Seoul, south of Han River
Han River (Korea)
The Han River is a major river in South Korea and the fourth longest river on the Korean peninsula after the Amnok, Duman, and Nakdong rivers. It is formed by the confluence of the Namhan River , which originates in Mount Daedeok, and the Bukhan River , which originates on the slopes of Mount...
, which includes Gangnam-gu
Gangnam-gu
Gangnam-gu is one of the 25 gu which make up the city of Seoul, South Korea. It is one of the most affluent areas of Seoul and is located in the southeast of the city...
, Seocho-gu
Seocho-gu
Seocho-gu is a gu of Seoul, South Korea. It is a popular residential area for the mid- or upper-class residents in Seoul and home to the Supreme Court and the Supreme Prosecutors' Office. Seocho Samsung Town in Seocho-dong, near Gangnam Station, is the headquarter of the several corporations of the...
and Songpa-gu
Songpa-gu
Songpa-gu is a district of Seoul, South Korea. Songpa is located at the southeastern part of Seoul, the capital of Korea, Songpa is a district with the largest population...
. Gangnam district is famous for its expensive apartments. Apartment prices in Gangnam are the highest in South Korea, according to a Kookmin Bank
Kookmin Bank
KB Kookmin Bank or KB is the largest bank by both asset value and market capitalization in South Korea.The bank is led by Kang Chung-Won who previously worked for Seoulbank and oversaw its sale to competitor Hana Bank before moving to Kookmin.Kookmin intended to take over Korea Exchange Bank, a...
analysis on apartment prices in the seven areas where prices have soared. Songpa-gu
Songpa-gu
Songpa-gu is a district of Seoul, South Korea. Songpa is located at the southeastern part of Seoul, the capital of Korea, Songpa is a district with the largest population...
and Seocho-gu
Seocho-gu
Seocho-gu is a gu of Seoul, South Korea. It is a popular residential area for the mid- or upper-class residents in Seoul and home to the Supreme Court and the Supreme Prosecutors' Office. Seocho Samsung Town in Seocho-dong, near Gangnam Station, is the headquarter of the several corporations of the...
come second and third respectively followed by Cheongdam-dong
Cheongdam-dong
Cheongdam-dong is a ward of Gangnam-gu in Seoul, South Korea. It is referred to as "Fashion and Art Street" of Gangnam which has 50 shops for imported foreign brands, local fashion designers' shops, and 30 galleries near the upscale Galleria Department Store in Apgujeong-dong towards Cheongdam Park...
, all in Seoul. Besides, many multinational corporations are located in the Gangnam area.
Mok-dong (목동)
Mok-dongMok-dong
Mok-dong is a dong, neighbourhood of Yangcheon-gu in Seoul, South Korea.It is famous for its education and good schools, including Yang-Chung High school where Phillip Kim, or Dong yeon Kim goes to, and which has more than 100 years of history. For this reason, it is home to many upper class...
lies west of Seoul, in Yangcheon-gu
Yangcheon-gu
Yangcheon-gu is a gu, or district, of Seoul, South Korea, located on the southwest side of the Han River. At the centre of this district is the Mok-dong area, which is home to numerous shopping outlets, bars and restaurants, an ice rink, and large residential buildings inhabited by mostly middle...
. Residents in this area are considered relatively affluent.
Pyeongchang-dong (평창동)
It is situated within walking distance of Bukhansan National ParkBukhansan National Park
The Bukhansan National Park in Seoul and Gyeonggi covers an area of and was established on 2 April 1983. Bukhansan means "mountains north of the Han River."...
, it boasts fresh air and scenic beauty. Many citizens of Seoul consider the Pyeongchang-dong district in Jongno-gu
Jongno-gu
Jongno-gu is a gu, or district, in central Seoul, South Korea. It takes its name from a major local street, Jongno, which means "Bell Street". Jongno-gu has been the center of the city for 600 years, since where the Joseon dynasty established its capital city...
as one of the most wealthy neighborhoods. The area is lined with two- or three-story houses with a fairytale gable roof, a symbol of upscale homes in Korean society.
A hilly road leading to Bukak Park Hotel on Segumjung road, and Pyeongchang-dong is on the left, across the Olympia Hotel Seoul. The road is quiet and tranquil. A few cars are parked on the roadsides lined with houses and buildings. Newcomers, as well as those with an aesthetic sense for architecture, can easily feel a distinct atmosphere because of the calmness, artistic vibes, something which is missing from hectic city life.
Hannam-dong (한남동) and Itaewon (이태원)
Hannam-dong, the UN Village vicinity, contains residences of several high ranking Korean officials and many foreign ambassadorAmbassador
An ambassador is the highest ranking diplomat who represents a nation and is usually accredited to a foreign sovereign or government, or to an international organization....
s. The Itaewon
Itaewon
Itaewon is a city district, in Yongsan-gu, Seoul, South Korea. It is served by Seoul Subway Line 6 via Itaewon, Noksapyeong and Hanganjin stations. About 22,000 people reside in the district and it is a popular area for residents of Seoul, tourists, and U.S...
area, close to the Yongsan Garrison
Yongsan Garrison
United States Army Garrison Yongsan is located in Seoul, South Korea and is home to the headquarters for the U.S. military presence in Korea, known as United States Forces Korea , as well as the headquarters for the Eighth United States Army and Installation Management Command Korea Region...
of United States Forces Korea
United States Forces Korea
United States Forces Korea refers to the ground, air and naval divisions of the United States armed forces stationed in South Korea....
, is dotted with apartments, villas and large houses with gardens.
Seongbuk-dong (성북동)
The big advantage of living in Seongbuk-dong is its beautiful surroundings and cleaner atmosphere, as the hilly area is located near the wooded Mt. Bukhan.Yeouido (여의도)
YeouidoYeouido
Yeouido is a large island in the Han River in Seoul, South Korea. It is Seoul's main business and investment banking district. Its 8.4 square kilometers are home to some 30,988 people. The island is located in the Yeongdeungpo-gu district of Seoul, and largely corresponds to the precinct of...
is a large island within Seoul, and the center of Seoul's business district. Its 8.4 square kilometers are home to some 30,988 people. The island is located in the Yeongdeungpo-gu
Yeongdeungpo-gu
Yeongdeungpo-gu is an administrative district in southwest Seoul, South Korea. Although the origin of the name is uncertain, the first two syllables are thought to be from "yeongdeung" or "divine ascent", a shamanic rite. The third syllable is "po", representing water , referring to the...
district of Seoul, and largely corresponds to the precinct of Yeoui-dong. Lying on the south edge of the Han River, it contains the National Assembly of South Korea
National Assembly of South Korea
The National Assembly of the Republic of Korea is a 299-member unicameral legislature. The latest general elections were held on April 9, 2008. Single-member constituencies comprise 245 of the National Assembly's seats, while the remaining 54 are allocated by proportional representation...
, the Yoido Full Gospel Church
Yoido Full Gospel Church
Yoido Full Gospel Church is a Pentecostal church on Yeouido in Seoul, South Korea. With about 1,000,000 members , it is the largest Pentecostal Christian congregation in South Korea, and the world...
, and many office buildings including the 63 Building
63 Building
The 63 Building , officially the 63 City, is a skyscraper on Yeouido island, overlooking the Han River in Seoul, South Korea. At 249 meters high, it surpassed Sunshine 60 in Tokyo and became the tallest building outside North America when completed in 1985, but a few months later the title went to...
and the headquarters of LG
LG
LG may refer to:*LG Corp., a South Korean electronics and petrochemicals conglomerate*LG Electronics, an affiliate of the South Korean LG Group which produces electronic products* Lawrence Graham, a London headquartered firm of business lawyers...
, and other chaebol
Chaebol
Chaebol refers to a South Korean form of business conglomerate. They are global multinationals owning numerous international enterprises. The term is often used in a context similar to that of the English word "conglomerate"...
.
Bundang (분당)
BundangBundang
Bundang is the southernmost district of Seongnam, Gyeonggi-do, South Korea. In addition to being the most populous part of the city, it also has the status of being one of the wealthiest regions in Gyeonggi Province...
is the southernmost district of Seongnam
Seongnam
Seongnam is the second largest city in South Korea's Gyeonggi province after Suwon and the 9th largest city in the country, with a population of nearly 1 million...
, South Korea. It is considered to be the thriving, beating heart of modern day Seongnam. In the early 1990s, the Bundang area became a planned community as a response to alleviating the excessive demand for apartments in the similarly affluent, but much older Gangnam district
Gangnam District
Gangnam, Seocho and Songpa are three "gu" in Seoul, South Korea, individually known as Gangnam-gu, Seocho-gu and Songpa-gu and often collectively referred to as "Gangnam". These districts are known for their expensive real estate. Media reports frequently refer to this area when they cover stories...
area. Many of Bundang's early residents actually hailed from the Gangnam area, thereby distinguishing Bundang as an affluent burrough in much the same manner as Gangnam. Before this period of expansion however, there was mostly farmland in this area. There are still a few farms in the Bundang area, particularly in the Pangyo
Pangyo
Pangyo refers to a planned city surrounding Pangyo-dong, Baekhyeon-dong, Unjung-dong, and Sampyeong-dong of Bundang-gu and Siheung-dong and Sasong-dong of Sujeong-gu ....
area. As the demand for more housing continues, Bundang is expected to continue expanding.
Ilsan (일산)
IlsanIlsan
Ilsan is the name of two districts or wards in Goyang, Gyeonggi-do, South Korea...
is the name of two districts (West and East) in Goyang
Goyang
Goyang is a city in Gyeonggi Province, South Korea. Goyang includes the new city of Ilsan, which is connected to Seoul via Seoul Subway Line 3. Goyang is bordered by Seoul to the south; walls of the Bukhan Mountain Fortress lie along a small portion of this border.Several institutions of higher...
, Gyeonggi-do
Gyeonggi-do
Gyeonggi-do is the most populous province in South Korea. The provincial capital is located at Suwon. Seoul—South Korea's largest city and national capital—is located in the heart of the province, but has been separately administered as a provincial-level special city since 1946...
. It is more organized and planned than the rest of the city, Goyang (Deogyang-gu), and its residents are generally more affluent. Ilsan is located northwest of Seoul. Like other satellite cities such as Bundang and Pyeongchon, Ilsan was planned in order to alleviate housing shortages in the city of Seoul. Ilsan has experienced phenomenal growth in the past 15 years, usually drawing in younger generations of upper middle-class Koreans.
Pangyo (판교)
PangyoPangyo
Pangyo refers to a planned city surrounding Pangyo-dong, Baekhyeon-dong, Unjung-dong, and Sampyeong-dong of Bundang-gu and Siheung-dong and Sasong-dong of Sujeong-gu ....
is planned for alleviating the excessive demand for apartments in Gangnam and Bundang.
Jeonse
When comparing the rental deposits or Jeonse with the apartment price, the ratio was the lowest for Gangnam apartments. The Jeonse to house price ratio is often used as a tool to gauge whether or not the house price is inflated.In Korea, there is a unique way of renting a house called Jeonse, in which a renter makes a lump-sum deposit on a rental space, instead of paying monthly rent, at anywhere from 50-100% of the market value, and gets back the whole deposit when the rent contract ends. The home-owner is free to invest the deposit as he or she wants, as long as the same amount of money is returned to the tenant at the end of the contract.
Since the Jeonse price reflects the actual demand of people who reside in the area, the gap between rental deposits for Jeonse and the apartment sales price means there might be a bubble
Economic bubble
An economic bubble is "trade in high volumes at prices that are considerably at variance with intrinsic values"...
in the apartment price.
Depending on the area Jeonse prices can range as much as 25~80% of the home's sale price. The expensive Gangnam area's Jeonse is about 25~35% of the sales price because the properties are so expensive.