By Jane Han
Staff Reporter
A four-bedroom unit at Poonglim I-Want, one of the biggest apartment complexes in Songdo City, is where Kim Hye-jin plans to move to as soon as she gets rid of her current apartment in Gangnam. But the mother of two is starting to get nervous because she's worried that this will not be possible before next fall, when Songdo International School opens.
``My kids have to live in the area if they want to attend the new international school,'' said Kim. ``In that case, it's better to be settled down earlier to get a head start.''
The new private preparatory school is scheduled to open next September and expects to draw more than 2,000 students, of which 30 percent or more will be native Koreans. The international school, 40 miles outside of Seoul has been at the center of attention for many education-crazy moms wanting an American-style schooling for their children.
And this obsession has helped prop up home prices in the area, even amid the mounting uncertainties clogging up the housing market.
According to realty brokers in the area, the average price for a 145 square meter (three-bedroom) apartment near the school is around 750 million won ($600,000), up 10 percent following the announcement of the school's opening. Pre-sale value hovers in the 20 million won range per 3.3 square meters, which is about two to three times higher than prices in other areas.
``We're expecting values to go up another 100 million won next year when the school actually opens,'' said one property broker in Songdo. ``Schools are one of the biggest premiums that control property prices in Korea because they either drive up or drag down demand.''
This seems right because once sky-high, ironclad prices in Gangnam ― where some of the nation's best schools and preparatory institutes are located ― are starting to wobble on news that Seoul will allow students to choose schools from outside their residential districts starting 2010.
Under the current system, students must reside in Gangnam to attend a school there, and this was one of the main factors that drove up apartment values.
Despite its small size, a two-bedroom apartment in Daechi-dong, the city's ``hagwon central,'' used to cost well over one billion won early this year, but now the price floats just above 800 million won. Other homes have also shed about 10 percent in value this year.
Kim Eun-kyung, an analyst at Speed Bank, a real estate consultancy, says the new school zoning system coupled with the general market slowdown will further pull down prices in southern Seoul districts.