The map of rich neighborhoods in the Seoul metropolitan area is changing as a result of a real estate market slump that has been going on since the financial crisis started in 2008.
More people are giving serious consideration to finding an environment where they can live comfortably and conveniently, rather than investing in property in the hope that the price will go up and make them rich.
Emerging neighborhoods include Banpo-dong in Seocho and a part of Yongsan, both in Seoul, and Pangyo in Seongnam, Gyeonggi Province.
Housing prices in Banpo-dong have risen more sharply over the past five years than in established upscale areas such as Apgujeong-dong, Daechi-dong and Gaepo-dong in the Gangnam district.
According to estate agents Dr. Apartment, the average apartment price in Banpo-dong rose from W32.65 million per 3.3 sq.m. in January 2008 to W34.24 million. In contrast, housing prices in Apgujeong-dong, Daechi-dong and Gaepo-dong fell more than 20 percent over the past five years, even though many older apartments are being renovated there.
"The market situation changed drastically after 5,000 new luxury apartment units were built there around 2009," an estate agent in Banpo-dong said. "They attracted a lot of attention, which drove up their prices."
This is also true of parts of Gyeonggi Province. Apartments in Pangyo now cost on average W19.56 million per 3.3 sq.m., up about 2.6 percent from April 2009 when many people moved into new apartments there. By contrast, the average price of apartments in nearby Bundang fell 12.5 percent to W15.13 million.
Many homes in Bundang have already become obsolescent because they are more than 20 years old. But in Pangyo many new apartments were built and office workers moved in as one company after another rushed into Pangyo. The proximity to Seoul is another draw.
The part of Yongsan in Seoul where Yongsan Park is under development is now drawing more interest than upscale Hannam-dong in the same district. The government decided in 2011 to build Yongsan Park, measuring 2.42 million sq.m., with a plan to develop the area and open it to the public from 2017.
The average apartment price nearby is now W33.4 million per 3.3 sq.m., making it the second most expensive area in Seoul after Banpo-dong.
"An increasing number of people are starting to consider their current utility the most important factor when they buy homes, rather than investment for the future," said Ham Young-jin at Real Estate 114.