An apartment in Seoul’s Apgujeong Shinhyundai complex changed hands last week for 9.3 billion won (about $7 million), which sounds like a lot until you learn that the same size unit in the same complex sold for 12.8 billion won in December. That is a 3.5 billion won haircut, roughly $2.6 million, in ten months, and it is why “reconstruction” (재건축) was one of the most-searched terms in Korea this weekend.
What happened
Korea’s weekly apartment price index, published every Thursday by the state-run Korea Real Estate Board, showed Gangnam District falling 0.38% in the week to October 26, a steeper decline than the week before. Neighboring Seocho (down 0.35%) and Songpa (down 0.22%) fell too. These three districts are the “Gangnam belt,” the most expensive housing in the country, and for most of 2025 and early 2026 they were the market’s engine.
The slide has been running since mid-August. By the second week of October, Gangnam and Seocho had logged ten straight weekly declines, and in the last week of September Gangnam dropped 0.56% in a single week, its sharpest fall in about seven years and eight months.
The Herald Business combed through the Ministry of Land’s transaction disclosures and found the damage concentrated in reconstruction complexes. At Eunma in Daechi-dong, a 76 square meter unit sold for 3.12 billion won, 680 million below its record. An 84 square meter unit went for 3.4 billion won, 910 million below peak. At Apgujeong’s Guhyundai, a 160 square meter unit cleared at 9 billion won, 800 million under its high.
Why an aging apartment costs $2.5 million
Outsiders are often baffled that Eunma, a decades-old complex with a reputation for dated pipes, trades at prices that would buy a penthouse elsewhere. The answer is that nobody is buying the apartment. They are buying the land under it and the right to a brand-new unit once the building is demolished and rebuilt, a process Koreans call jaegeonchuk. Owners who move into these aging blocks and tough out the conditions while waiting for redevelopment even have a slang term for it, momtech (몸테크), a mash-up of “body” and “financial technology.”
Because the payoff is years away and depends on approvals, these units behave less like homes and more like options on government policy. As KB Kookmin Bank real estate specialist Kim Hyo-seon told the Herald, reconstruction apartments are effectively investment products, so they swing hard when rules change. And rules did change: in August the government unveiled a tax reform that trims the long-term holding deduction for owners of high-priced homes and for single-home owners who do not live in the property. Together with tight mortgage limits, that squeezed the exact buyer who used to pay up for Gangnam rebuild units. The Real Estate Board itself attributed the latest drop to owners at some reconstruction complexes listing at lower prices.
Everyone else is still going up
This is a Gangnam story, not a Seoul crash. The citywide index rose 0.09% in the latest week, extending a streak of weekly gains that began in early 2025, with the 14 districts north of the Han River up 0.22%. In the “semiconductor belt” south of the city, Suwon’s Yeongtong and Gunpo each rose 0.58% in a week, lifted by expectations around the chip industry and by Samsung Electronics’ employee housing loans, per the Asia Business Daily.
Even within the top end, the split is stark. While rebuild units fell, the Nine One Hannam luxury complex in Yongsan set a new record of 14.3 billion won for a 206 square meter unit. Finished luxury homes, the Herald’s brokers explained, are bought to live in and barely trade, so their prices hold; rebuild units are bought to flip and reprice fast.
What comes next depends on whether the government softens the tax plan or holds the line. Woori Bank’s Nam Hyuk-woo expects the Gangnam belt to stay weak for a while as buyers wait for clarity. For momtech practitioners who moved into Eunma to wait for the bulldozers, the waiting just got more expensive.
Sources
- The Herald Business — Apgujeong Hyundai flats sell W3.5b below peak as Hannam luxury sets record
- Seoul Economic Daily — Seoul’s Gangnam Belt Falls Again as Chip-Belt Suburbs Keep Climbing
- The Asia Business Daily — Gangnam Prices Fall for 10th Straight Week
- Seoul Economic Daily — Gangnam Apartment Price Drop Narrows After Steepest Fall in 7 Years