Despite Housing Market Recovery, Transaction Slump Continues in Seoul's Knowledge Industry Centers

From the latter half of 2021 to the present year, the real estate market has been experiencing a revival in trading volume and prices due to relaxed regulations. However, in contrast, the transaction market in Seoul's knowledge industry centers remains stagnant and challenging.

 

In conclusion, while the housing market is showing signs of recovery, the transaction market in knowledge industry centers remains challenging.

 

According to recent data analyzed by Zigbang, based on information from the Registration Information Plaza and data from the Korea Industrial Complex Corporation, transaction volume in Seoul's knowledge industry centers peaked at 3,470 in the first half of 2021 but gradually declined. In the latter half of last year, only 1,024 transactions were recorded, and in the first half of this year, it further decreased to 989 transactions.

 

In the past, knowledge industry centers were relatively unregulated, offering an attractive investment option with loan-to-value ratios (LTV) ranging from 70% to 80%. However, last year's factors such as rising interest rates, economic downturn, and oversupply led to a contraction in transactions.

 

 

Nevertheless, even with reduced transaction volumes, properties in areas with high location preference, such as Seoul and the surrounding Gyeonggi Province, have shown an upward trend in property prices.

 

In the first half of 2023, the highest-priced transaction in a knowledge industry center took place in 'Ace High-End Tower 3' located in Gasan-dong, Geumcheon-gu, Seoul. This property, with a floor area of 701.5 square meters (13th floor), was sold for 5 billion KRW in March.

 

 

Similarly, 'Bundang Suji U-Tower' in Dongcheon-dong, Suji-gu, Yongin, recorded a transaction of 2.9 billion KRW for a 291.09 square meter unit on the 14th floor in February. In April, 'Digital Empire' in Gwanyang-dong, Dongan-gu, Anyang, saw a transaction of 2.345 billion KRW for a 357.14 square meter unit on the 6th floor.

 

Among the knowledge industry center properties that were sold at high prices, eight out of the top ten were located in Seongsu-dong, Seongdong-gu, Seoul. For instance, 'Pofu' in Seongsu-dong 1-ga recorded a transaction of 2.12 billion KRW for a 107.71 square meter unit on the 7th floor in February, resulting in a per-square-meter price of 1.968 million KRW.

 

 

Likewise, 'Seongsu Yeok Escape Iwon Tower' in Seongsu-dong 2-ga transacted a 80.56 square meter unit on the 9th floor for 1.5 billion KRW in May, with a per-square-meter price of 1.862 million KRW.

 

A representative from Zigbang mentioned, "Transactions appear to be concentrated in locations with excellent accessibility and relatively new knowledge industry centers." They added, "However, the rising property prices have led to an increase in rental rates to secure reasonable rental yields, reducing the competitiveness of previously low rental rates. This may lead to changes in the knowledge industry center investment market."

 

 

In conclusion, while the housing market is showing signs of recovery, the transaction market in knowledge industry centers remains challenging. It's important to keep an eye on future developments in this sector.