Rising Apartment Prices in Seoul
Apartment prices in Seoul have been on the rise for 17 consecutive weeks, marking the highest rate of increase in nearly six years. Notably, the prices of newer apartments have surged significantly compared to older ones. For instance, a 9-year-old apartment in Seodaemun-gu saw an increase of over 100 million won since the beginning of the year, while older apartments in the same area experienced a decline in prices.
Real estate experts attribute this trend to the high costs of reconstruction and the market's preference for newer constructions. Apartments less than 5 years old in Seoul have seen a 1.63% increase in sales prices this year, whereas those over 20 years old have only risen by 0.31%. This is a stark contrast to the real estate boom in 2021, where older constructions saw a much higher appreciation rate.
Mega Project in Ramla: A Game Changer
In Ramla, a significant urban renewal project is underway, aiming to transform the Ben Gurion neighborhood. The project, spread over 150 dunams, involves the demolition of 528 old housing units and the construction of 2,482 new ones. The first phase, set to begin in early 2025, will see the construction of 270 new apartments.
The project is expected to generate a gross profit of approximately NIS 451 million, with phase one alone contributing NIS 57 million. The development will also include commercial and office spaces, public buildings, and areas for residents' well-being. This initiative is part of a larger plan to develop over 30,000 housing units across various stages of planning, with a projected gross profit of NIS 2.2 billion by 2027.
Haifa's New Residential Developments
Haifa is also witnessing significant residential development, with the municipality recently approving permits for the construction of 553 new housing units in the 'Naot Navon' neighborhood. This project, managed by the Shapiro company, will include 9 residential buildings, some part of the 'Resident's Price' program, and will feature commercial spaces for the community.
In addition to 'Naot Navon,' another neighborhood, 'Freud Hills,' is set to begin construction, adding 340 housing units. These developments aim to provide extensive residential, commercial, and recreational facilities, enhancing the quality of life for Haifa's residents. The new neighborhoods are designed to offer modern amenities, green spaces, and proximity to essential services, making them attractive options for young families.
- The rise in Seoul's apartment prices is partly driven by the reluctance of core demand groups, particularly people in their 30s and 40s, to invest in older properties that require significant 'body tech' or reconstruction work. This demographic shift has further fueled the demand for newer constructions.
- In Ramla, the urban renewal project is not just about housing but also aims to enhance the overall infrastructure and quality of life in the area. The project's central location will provide high transportation accessibility and proximity to educational, leisure, and cultural institutions, making it a comprehensive development plan.
- Haifa's new residential projects are part of a broader strategy to remove barriers and streamline licensing procedures, ensuring timely completion and availability of housing units. The 'Naot Navon' neighborhood will integrate seamlessly with the existing 'Naot Peres' neighborhood, creating a continuous, vibrant community.
