By Jane Han
Staff Reporter
The faded paint, widening cracks and overall rundown look haven't stopped the prices of the decades-old Eunma Apartment from soaring above 1 billion won ($860,000), with its in-demand location and the anticipation it will eventually get a facelift consistently pumping the property's value. But will the symbolic southern Seoul complex ever be cleared for its much-awaited revamp?
Authorities in the Gangnam district are set to begin evaluating the 4,424-unit property for a safety permit later this month after almost six years of a standstill in progress, sparking attention among investors who have long been eyeing it.
Sitting in the center of South Korea's hotbed of private education, Eunma Apartment in Daechi-dong hasn't been hurt much by the global financial crisis that battered the local housing market early this year.
According to the government's latest home sales data, a 102-squre-meter unit was purchased for 1.35 billion won in September. This is nearly as expensive as properties twice as big in other parts of Seoul.
Besides the popular location, the redevelopment factor has propped up home values there over the years, experts say.
Eunma residents pushing for a full-fledged facelift have made repeated attempts to get construction approval since the early 2000s, but the government's tough regulations to curb speculation in the lucrative housing redevelopment market blocked any significant breakthroughs.
Still, prices have continued to rise, driven by anticipation.
The upcoming assessment by district authorities, however, is garnering renewed attention as observers speculate that the strong collective voice of the residents for a reconstruction will win a green light.
``Getting a safety permit is one of the very first steps to kick off the long process of redevelopment,'' said Lee Young-jin of Dr. Apart, a local property brokerage. ``We're looking at a higher chance this time because Eunma is getting older and residents are growing more aggressive.''
Gangnam district officials say the decision will be made early next year. But despite the uncertainty, the market has already begun responding.
Area realtors say inquiries have gone up by 20 to 30 percent in just days, with a majority of potential homebuyers seeking fire-sale units.
``I'm sensing more confidence among people interested in Eunma Apartment and other complexes preparing for revamps as the long-stalemated redevelopment market is starting to show some activity,'' said a property broker in Daechi-dong.
Ham Young-jin of Budongsan Serve said a spike in interest won't lead to a steep price hike at this point because Eunma Apartment is already overvalued.
``We will probably see an additional increase once there is actual progress in reconstruction, but until then, significant changes are unlikely,'' he said.