The Evolution and Impact of Korean Trophy Apartments

Trophy homes symbolize the wealth gap and distort the housing market, raising concerns for ordinary citizens.

### The Evolution and Impact of Trophy Homes and Apartments in Korea
* 🏙 ️ Trophy homes, characterized by high-rise apartments in Manhattan and mansions in Silicon Valley, symbolize the **wealth of the super-rich**, a term first coined by **Fortune magazine**.
* 💰 A recent sale of an **84 square meter apartment** in Banpo for **600 million won** has sparked discussions about the influence of high-priced properties on the housing market, prompting **calls for government intervention**.
* 📈 The gap in housing affordability is alarming, with households earning **80 million won needing over 11 years** to purchase an apartment in Seoul, highlighting the **growing polarization in property prices**.
* 🏢 The length of apartment names in Korea has increased significantly, with **33% of Seoul's apartments** having names longer than **eight characters**, yet it raises questions about the correlation between **name length and rising property values**.
* 📚 French geographer Valérie Julliot's research underscores the stark differences between apartments in Korea and France, where the latter are often associated with **lower social status**, while in Korea, they symbolize **wealth and desirability**.
* 🏗 The history of apartments in Korea reveals a transformation from **low-status housing** in the 1930s to the **luxurious living spaces** of today, influenced by key figures and events in the construction industry.
* 🏡 The concept of apartments evolved with the introduction of branded developments, leading to a **surge in prices and demand**, as seen in recent record-breaking sales like the **Nine One Hannam for 22 billion won**.
* 🔮 As the housing market continues to fluctuate, the need for **appropriate home values** and **improved living conditions** remains crucial for the future of housing in Korea.

Trophy homes refer to high-rise apartments in Manhattan, New York, and mansions in Silicon Valley. These are the homes chosen by the super-rich to showcase their wealth. The term trophy was first used by the American economic magazine Fortune in reference to trophy wives, and conversely, it has also been derived to refer to trophy husbands. Recently, news came out that an apartment in Banpo with a national standard area of 84 square meters was sold for 600 million won. This has led to discussions about how such high-priced apartments, like trophy homes, are distorting statistics and shaking up the housing market, suggesting that the Ministry of Land, Infrastructure, and Transport needs to step in to organize this situation. The concern is whether this will impact ordinary people. These days, there are indeed many news stories related to apartments. It now takes over 11 years for a household with an annual income of 80 million won in Seoul to purchase an apartment, highlighting the increasing polarization between Seoul and other regions.

The differences in property prices are widening, even within Seoul, with the price gap between the top 20% and the bottom 20% of apartments reaching its highest level since 2021. Additionally, there are reports of record-high prices and subscription competition rates of several hundred to one, which has led people to refer to it as a lottery. I’ve taken the time to organize all of this information. The topic for today is apartments in Korea. 

By the way, do you know which apartment has the longest name? It’s the “1st Phase Chorongkkot Village, 6th Complex, GTX Unjeong Station, Geumgang Pantheon Central Park.” It feels like a difficult memory test. Originally, many apartments were named after their locations or the companies that built them, such as Apgujeong Hyundai, Daechi Eumma, and Jamsil Jugong. As brand-name apartments emerged, nicknames also started to be attached, leading to a significant increase in the length of these names. Instead of simply using English words, various words from different countries began to appear, and new terms were created by combining them. If an apartment has a view of a river or lake, it becomes even more desirable.

If you are near River Lake Park or next to a hidden place, there is Park Torre. If you have an ocean view, there is Oceanview Marina. Among the 157 apartments in Seoul, it is said that 33% have names longer than eight characters. But does this really mean that house prices are going up? Anyway, back in 1970, the percentage of apartments was less than 1%, but as the length of apartment names has continued to increase, it has now surpassed three times that of single-family homes. The total number of houses in our country is 1,955, and among them, 64.6% are apartments. There was a foreigner interested in this phenomenon of apartments in Korea. Valérie Julliot, a French geographer, is said to be the first person to write a doctoral dissertation on Korean apartments, and she is not Korean. Anyway, in France, apartments have been slumified and have become hotbeds of various social problems, so why are people in Korea so enthusiastic about them? This has left a strong impression on her and prompted her research.

The conclusion is that apartments in Korea and France are completely different. They couldn't find an equivalent French term. In France, apartments are primarily inhabited by low-income individuals and symbolize a lower social status, while in Korea, apartments represent the opposite concept. Given that this research was conducted 20 years ago, I think the differences have likely increased since then. At that time, it was said that such characteristics of apartments were unique to Korea in the world. However, Korea's early apartments were not symbols of wealth at all. In the 1930s, during the colonial period, there were many buildings referred to as apartments in the central city of Gyeongseong. There were three-story Mikuni apartments, which did not resemble today's apartments at all. There were also four-story Chungjeong apartments, known as Toyota apartments. However, during this time, the apartments were not created by Koreans nor for Koreans.

It was not for us. The apartments built by our hands appeared after the war ended. The first was the Central Apartment built by Central Industry in 1957, followed by the 45-story Seadong Comprehensive Apartment, also constructed by Central Industry, in 1958. These apartments came with flush toilets. In 1962, the ambitious project of the Housing Corporation, the Mapo Apartment, was completed. This large complex introduced open kitchens and balconies, but initially, the occupancy rate was below 10%. This marked the beginning of a dark history of unsold units. People were not familiar with the concept of apartments. The biggest concern at the time was, Where do we bury the kimchi pots? There was no yard, so we couldn't place the kimchi jars outside, nor could we plant flowers, which led to a lack of preference for apartments. The flush toilets were also hard to get used to, and in the midst of all this, an accident occurred. When the coal boiler was turned off, gas leaked, resulting in the tragedy of a family of six.

It seems that there was a strange smell, and people were waving their hands in disbelief. So, the construction department conducted experiments. They released guinea pigs into the room, and they were fine. Still, people couldn't believe it. They wondered how animals and humans could coexist there. Eventually, the head of the construction department went into the room where the gas was said to leak the most and even spent the night there. Human experiments were quite different back then compared to now. From 1966, Kim Hyun-ok, the mayor of Seoul, known as the bulldozer mayor, pushed various construction projects. Wearing a helmet labeled assault, he directed operations on-site. The mayor himself operated a bulldozer, creating various underpasses, overpasses, the Namsan Tunnel, and the riverside road, claiming that the construction of the Han River, Yeouido, and Yeongdong development was his religion. In 1970, he shocked the entire nation.

An accident occurred when an apartment built on the slopes of Wausan in Mapo collapsed. There were over 60 casualties, and it was clear to anyone that it was a construction failure; it took only six months to build all 15 buildings. Costs were minimized, and this was a predicted disaster. Mayor Kim Hyun-ok also resigned because of this, and as a result, public anxiety about apartments significantly increased. However, the apartments built afterward were solid. It felt somewhat like renovating a barn. The Yeouido 10-Bong apartment, completed in 1971, was a place where a friend of mine, who believed that it should demonstrate resilience in any situation, was born. He mentioned that when trying to nail something into the wall, the nails wouldn’t go in at all. It was a 12-story high-rise with elevators, and all the lifts had drivers assigned. Out of 400 applicants, eight were selected. Even that demonstration apartment...

There were reports that high-ranking officials in Seoul pressured people into buying unsold apartments, and then a new concept of apartments emerged. The Han River Mansion, which means Daejeo Pack, is a pioneering model for middle-class apartments. The name mansion was inspired by the many high-end apartments in Japan that use this term, and especially in Dongbu Ichon-dong, there are still many mansions. They are equipped with top-quality materials, such as aluminum sashes, and have hot and cold water systems. They invested 2 million won to build a model house and spent 8 million won on advertising. The facilities of these modern apartments include Western-style amenities like heating, plumbing, and kitchens. However, initially, sales were sluggish, but celebrity marketing changed the atmosphere. I’m not sure about the marketing strategies, but the first resident was wealthy, followed by actress Ko Eun-na, Moon Jeong-suk, and Patty Kim moving in afterward. The apartments were not targeted at low-income residents.

This creates a perception that space is intended for the upper middle class and the upper class. As people become aware of the convenience of apartments and rumors spread that living there is enjoyable, it becomes necessary to pay a premium to make a transaction. From that point on, the concept of a premium begins to emerge. At that time, there were separate maid's rooms for live-in maids; there was even an article stating that 52.9% of households in Seoul employed a maid, which was almost one in every two homes. Even in 22-pyeong apartments, there were maid's rooms, and reports indicate that maids were also employed in newly built homes and even in shanties. In 1968, events such as the Blue House raid by Kim Shin-jo's group and the Pueblo incident, along with the Uljin-Samcheok guerrilla incident, led to accelerated development in Gangnam, resulting in the rapid construction of large public apartments. The first of these was the Banpo Jugong apartments, which were announced in 1973 as the Nam Seoul Apartments.

At that time, there were complaints about living well, and family planning was being discussed, including those who received priority in the allocation of housing and those who underwent surgical procedures. Many individuals who had undergone sterilization procedures also had a high chance of winning housing allocations. It’s quite interesting, isn’t it? When you gather with friends in the mountains, you often hear them say, You live in a village for the castrated, which makes you feel grateful deep down, but there’s also a sense of guilt. I felt a little good about it. Originally, there was a sandy area in Jamsil, now known as the Jamsil Jugong, and the current Hannam Bridge was built over the Third Han River Bridge. Private development became more active, and from 1975 to 1977, the Hyundai apartments in Apgujeong were constructed. This led to a decline in prices, and as these developments continued to appear in movies, people's perceptions of apartments changed completely, transforming them into a type of residence that many wished to experience at least once. There was also a period when apartment prices surged for the first time, due to the steel rebar crisis in 1973, which caused raw material prices to rise.

Apartment prices have risen, and the average monthly salary for bank employees was 520,000 won. At that time, the subscription fee was between 500,000 and 1,000,000 won, so people lined up to get their allocations. There were even part-time jobs for those who queued. In 1975, the capital gains tax was introduced, which caused a significant downturn. Some people consider the period after the Middle East boom in 1977 as the first major surge. From this point on, the atmosphere was intense. Subscriptions began, and the competition for the Yeouido Mokhwa Apartments was 45 to 1, with 4,000 people gathered on-site. The line extended about 500 meters to Yeouido Elementary School, while the competition for the Yeouido Hwarang Apartments was 70 to 1, and the Hakgok Apartments had a competition rate of 178 to 1. There were many interesting videos about this. The 1980s were the era of apartments. The proportion of apartments in the overall housing market surpassed that of single-family homes, and with the launch of the Gaepo district, a full-blown investment frenzy began. The symbol of greed, the so-called Bokbuin, took center stage.

There are many types, such as dry stickers and water stickers. The so-called dabang has turned the whole country into a speculative market. When we talk about stickers, we refer to the rights to purchase, like pre-sale rights, which can be bought and sold. People add a certain amount to the price and sell them. Currently, there is a resale restriction of two years, so one has to wait two years before selling. When there were no resale restrictions and no capital gains tax, if you sold a property worth 100 million won for 110 million won, that 10 million won was all your income. Right now, half of the moving corridor is set up. Why are you dismantling it? In the late 1980s, there was a period of skyrocketing housing prices. The economy was booming then, with the three lows and abundant liquidity, which flowed into real estate. The art market was also thriving, especially before the 1988 Seoul Olympics, with the Olympic Village in Jamsil and the first underground parking lot in the Asian Athlete Village, which was incredible. And in 1989, housing...

The 2 million won construction pledge was announced, and the new cities of Bundang, Ilsan, Jungdong, and Pyeongchon saw a rapid influx of developments, almost like the rush during the Chuseok holiday. It seemed like the housing prices in Seoul were stabilizing. The number of brokerage offices closing their doors was also increasing. At that time, the Namsan Wain apartment was also demolished. I remember watching it when I was in the third grade of elementary school; everyone gathered in front of the Terbi, and people were watching as it came crashing down. In 1995, the real estate registration system was implemented, making speculation more difficult, and in 1997, the IMF foreign exchange crisis led to a drastic short-term drop in prices. The era of empty houses began, and it was a time when not owning a house was considered fortunate. The Tower Palace in Dogok-dong was sold in June 1999, but at that time, the sales rate was only about 20% to 30%, which is a well-known story. Samsung...

About a minute's worth of unsold inventory was forcibly sold to executives, and it was the same as the 10-fold surplus. However, the Yeouido Shibum has increased about 20 times compared to its selling price, and the Power Palace has nearly tripled in value. The Samsung Dong I-Park, which was reluctantly sold, was launched in November 2000 with a contract rate below 20%. It was canceled and re-sold in 2001. The Mokdong Hi-Pe was also a failure. The Hyperion once surpassed the Yeouido 63 Building, becoming the tallest building in the country. Within a year, the higher Dogok-dong Tower Palace 3 was built. Seven years later, Haeundae Doosan I'Park and Haeundae The Zenith were completed, and now the tallest apartment in the country is the LCT J in Haeundae, Busan, standing at 85 floors and 339 meters high. Overall, it ranks second, with the first being Lotte World.

The market was not doing well, so the industry made efforts to improve the situation. This led to the emergence of branded apartments. In 1999 and 2000, Lotte Construction launched Lotte Castle and Samsung C&T introduced Remian, while DNC released E-Pyeonhan Sesang. There has been much debate about who was first, but the first branded apartment is said to be the Central Highrise, established in 1981. Anyway, after 2000, GS Construction introduced Xi, Daewoo Construction launched Prugio, and Posco developed The Shop, while Hyundai Industrial Development created I-Park. Top celebrities were used as models, and the value of apartments began to be determined based on their brands, initiating further changes. Starting in 2001, housing prices began to rise again. Gangnam apartments surpassed 1 billion won, with prices increasing by 100 million won each month. After 2003,

Countermeasures are pouring in, but prices continue to rise. Then, when the global financial crisis hit in 2008, there was a sharp decline. In Pangyo, an apartment recorded a competition rate of 62 to 1, and there are vacant units. There was a playground for children in Banpo Jaei, and there was a lake within the complex at Remian Prestige. As the real estate market was flooded with listings and housing prices fell, demand for jeonse surged, leading to an increase in jeonse prices. Starting from 2010, construction companies changed their names again, introducing more upscale rental housing brands like Lotte Construction's Ruel, among others. After 2014, apartment prices began to rise again, increasing for about 88 months. By 2021, prices peaked, and from 2022, the rate of increase slowed down. Recently, prices have started to rise again, setting new records for the highest-priced apartments. The Nine One Hannam in Yongsan recently sold for 22 billion won.

It had been just a few days since the transaction of 20 billion won took place. The subscription levels are at a frenzy, and recently, the Lotte Castle at Dongtan Station set a new record. For a single unit, 2,944,000 people applied. In Heukseok, Dongjak, for two units available, 934,000 people showed interest. So, what will happen next? This is really important. The value of homes must be appropriate, and the living environment needs to improve. I will conclude with that. After all, we have a home, and we are here. Tomorrow, truly good things are waiting for us.

서민 위한 청약이 로또?! 애증의 한국 아파트 / 소비더머니

브랜드에 얽힌 사람과 돈, 그리고 세상의 변화.
하지만 소비더머니를 통해 전하고 싶은 것은,
'이야기' 그 자체입니다.


* 문의  
brandstory@mbc.co.kr


소비더머니

The Impact of Trophy Homes and Long Apartment Names in Korea

Trophy homes, chosen by the super-rich, are distorting the housing market in Korea, with high-priced apartments causing concern for ordinary people.

The length of apartment names in Seoul has increased significantly, with 33% of them now having names longer than eight characters.

This trend, along with the growing percentage of apartments in the housing market, has attracted the attention of foreign researchers, highlighting the unique phenomenon of apartment living in Korea.

The Contrast Between Apartments in Korea and France

Apartments in Korea and France have completely different social connotations, with French apartments symbolizing low income and lower social status, while Korean apartments represent the opposite.

The unique characteristics of Korean apartments, which were not symbols of wealth initially, have likely intensified over the past 20 years.

The development of modern Korean apartments began after the war, with significant projects and controversial incidents shaping their history and public perception.

The Collapse of Wausan Apartments and the Evolution of Apartment Living in Seoul

The Wausan apartment collapse in Mapo, resulting in over 60 casualties, was a clear construction failure and led to the resignation of Mayor Kim Hyun-ok.

The subsequent apartments built in the area were solid, with the Yeouido 10-Bong apartment pioneering the concept of middle-class living.

The emergence of premium apartments, celebrity marketing, and the need for live-in maids created a perception of exclusivity, while the rapid development in Gangnam following political events led to the construction of large public apartments.

Complaints about living conditions and family planning were common, with those undergoing sterilization procedures having a higher chance of winning housing allocations.

Private development in Jamsil, including the construction of Hyundai apartments in Apgujeong, led to a transformation in people's perceptions of apartments as desirable residences.

The 1980s marked a surge in apartment prices and competition for allocations, with the housing market becoming increasingly speculative and driven by pre-sale rights and high demand.

The Evolution of the South Korean Real Estate Market

A 2 million won construction pledge led to rapid development in new cities, stabilizing housing prices in Seoul.

The implementation of a real estate registration system in 1995 and the 1997 IMF crisis caused a short-term drop in prices, leading to a surplus of unsold properties.

The emergence of branded apartments after 2000, along with the use of top celebrities as models, shifted the market dynamics and contributed to a rise in housing prices.

Real estate prices have been on a rollercoaster, with a sharp decline during the 2008 financial crisis and a subsequent surge in demand for jeonse.

From 2010, construction companies introduced upscale rental housing brands, and apartment prices began to rise again after 2014, peaking in 2021.

Recently, there has been a new wave of price increases, setting records for the highest-priced apartments and causing a frenzy in subscription levels.