Famous Gangnam is cheaper if you don't mind the cold
Prices of flats in Seoul have fallen sharply and real estate agencies are going out of business
Global pop sensation Psy, who stormed Hong Kong at an awards ceremony last Friday, made his name poking fun at the newly rich in Gangnam, one of Seoul's most affluent areas.
At about the time his hit video Gangnam Style went viral on YouTube, however, the expensive district was already becoming less costly to live in.
Gangnam, so named because it is "south of the [Han] river", was one of the South Korean capital's least developed parts until the early 1980s. As the country developed, the area lured new wealth and now houses high-end boutiques, luxury flats, galleries and plastic surgery clinics.
About 1 per cent of Seoul's population of more than 10 million live in Gangnam, where home prices soared rapidly between 2001 and 2006, a Korean friend told me while I was in the capital two weeks ago. She said prices went up by as much as half in a few years, giving the impression prices in Gangnam would never fall.
Businessweek says flats in Gangnam cost an average of US$716,000, which would take an average Korean household 18 years to earn. Yet although close to HK$6 million, it is still a lot of money for many home seekers in Hong Kong. Nearly all the new flats in our city are priced above this.
Of course, there is a wide range of properties in Gangnam, where film stars and K-pop celebrities have bought posh apartments. For example, singer-actor Kim Jaejoong of popular idol group JYJ reportedly spent 3.5 billion won (HK$24.8 million) for an apartment of more than 3,200 square feet in Samsung-dong, Gangnam, in August last year.
"But in general, I think it's a good time to buy flats in Korea," my Korean friend said. "It's because home prices have dropped a lot since last year."
Another Korean, who lives in Hong Kong, told me the same thing last week.
Home prices in Seoul recorded the steepest fall in 10 years in this year's first half, the Korea Times reported, citing data from a property website.
It said prices dropped 2.14 per cent year on year. Twenty-four of the 25 districts in Seoul recorded declines in prices during the period.
The Songpa and Gangnam districts posted the largest average declines - 3.34 per cent and 3.29 per cent, respectively.
Other Korean media reported 5,524 home transactions in Gangnam and two neighbouring districts, Seocho and Songpa, in the first eight months of the year. Dividing the figure by the number of property agents, each agent sealed only 1.14 deals on average, causing more than 60 real estate agencies in these districts to shut down.
As a big fan of Korean culture, I have long dreamed about living in Seoul. However, even if I were eligible and had the money to buy a flat there, I am afraid I would have to give it a pass.
After strolling down the streets of Gangnam's Apgujeong neighbourhood and other parts of the city for a few days, I came down with a respiratory infection. I think I should stay in warmer climes like Hong Kong.