Analysis of Seocho-gu Bangbae-dong 5.5 Billion Won Small Building: Naebang Station Ultra-Station Area Investment Success Story (ft. Bangbae Redevelopment Benefit, 3.2 Billion Won Capital Gain in 9 Years)
Bangbae-dong, Seocho-gu, Seoul, is a region that consistently attracts attention from real estate investors due to its convenient transportation environment and major development boosts like the Bangbae redevelopment project. Particularly, the area around Naebang Station on Subway Line 7 is highly valued, offering the advantage of being a double station area along with the excellent residential environment of Seocho-gu. News of a small building located in this Naebang Station ultra-station area being transacted for the mid-5 billion Won range is drawing significant attention from many real estate investors. This transaction, which recorded a capital gain of over 3.2 billion Won in just 9 years, clearly demonstrates the astonishing potential of investing in small buildings in the Bangbae-dong station area, Seocho-gu. Today, we will delve into this transaction case to conduct an in-depth analysis of the secrets to successful investment in small buildings in the Naebang Station ultra-station area and the investment appeal of the Bangbae redevelopment beneficiary area.
Seocho-gu Bangbae-dong 876-20, Transacted for 5.5 Billion Won
The building we will examine is located at Bangbae-dong, 876-20 in Seocho-gu, and it is a small building whose sale was completed for 5.5 billion Won in February 2025. This building was previously transacted for 2.275 billion Won in March 2016, approximately 9 years prior.
Key Features and Location Analysis of the Transacted Building:
- Naebang Station Ultra-Station Area: It is an undisputed ultra-station area building located within walking distance of Naebang Station Exit on Subway Line 7. The advantage of being a double station area, allowing access to both Bangbae Station on Line 4 and Naebang Station on Line 7, maximizes public transportation convenience, secures abundant foot traffic, and is very advantageous for attracting tenants for commercial spaces and offices within the building. It holds high value along with the excellent residential environment of Bangbae-dong, Seocho-gu.
- New-Grade Building (Completed in 2017): It is a new-grade building of B1F to 5F scale, completed on October 18, 2017. Less than 8 years have passed since completion, so the building condition is very good, and it incorporates relatively recent architectural standards and design, resulting in high tenant preference. It also has the advantage of lower maintenance costs compared to older buildings.
- Second Class General Residential Zone: This building is located in a 'Second Class General Residential Zone'. This is an area primarily for low- and mid-rise residential buildings aimed at creating a pleasant environment. However, based on its locational characteristics as a Naebang Station ultra-station area, it has the potential for diverse uses such as commercial spaces, offices, and medical clinics. It appears to have been constructed efficiently utilizing the building coverage ratio and floor area ratio (land area 50.12 pyeong, total floor area 133.75 pyeong).
- Land Area and Total Floor Area: The land area is 50.12 pyeong (approx. 165.7㎡), and the total floor area is 133.75 pyeong (approx. 442.16㎡). The total floor area is high relative to the land area, indicating efficient utilization of the floor area ratio during construction, which is a factor that favors securing rental space and increasing yield.
- Fronting a 4m Road: It fronts a 4m road. While not a main road, it is located on a back road in the Naebang Station ultra-station area, ensuring a certain level of exposure to foot traffic.
- Investment in the 5 Billion Won Range: The sale price of 5.5 billion Won can be assessed as a reasonable level considering its locational value as the best location in the Naebang Station ultra-station area, the fact that it is a new-grade building, and its location as a Bangbae redevelopment beneficiary area. It is an attractive investment target for investors considering new-grade building investment in a core station area in Seoul.
3.225 Billion Won Capital Gain in 9 Years, Seocho-gu Building Investment Success Story
The background to this building's ability to record a massive capital gain of 3.225 billion Won over a period of just 9 years is a result of the combined effect of the unique golden location of the Naebang Station ultra-station area, the steady appreciation of the Seocho-gu Bangbae-dong real estate market, and expectations for the Bangbae redevelopment project.
Investment Profit Analysis:
- March 2016 Transaction Price: 2.275 billion Won (approx. 45.50 million Won per pyeong)
- February 2025 Transaction Price: 5.5 billion Won (approx. 109.73 million Won per pyeong)
- Holding Period: Approx. 8 years and 11 months (Approx. 8.91 years)
- Total Capital Gain: Approx. 3.225 billion Won (Simple capital gain analysis)
- Annual Average Capital Gain: Approx. 361.95 million Won (Simple capital gain analysis)
- Monthly Average Profit: Approx. 30.16 million Won (Simple capital gain analysis)
In just 9 years, the building's price increased by 3.225 billion Won, or over 141%. The price per pyeong also jumped more than double in 9 years, from the mid-40 million Won range to the low 100 million Won range. This calculation is based solely on simple capital gain and does not include rental income generated during the holding period, building maintenance costs, taxes, etc. Including rental income would result in a much higher actual investment yield. The fact that asset value increased explosively in a short period is a clear example demonstrating the astonishing potential of investing in small buildings in the Bangbae-dong station area, Seocho-gu.
Bangbae Redevelopment Benefit, Promoting Small Building Value Increase
The Bangbae redevelopment project underway in the Bangbae-dong area, Seocho-gu, is a major boost that will significantly impact real estate value appreciation in the Naebang Station area.
- Improvement of Residential Environment: Through the redevelopment project, aging residential environments will be improved with the construction of modern apartment complexes, etc., increasing the overall value of the area.
- Increase in Resident Population and Foot Traffic: The move-in of residents to large new apartment complexes will lead to an increase in resident population, which in turn will result in commercial area revitalization and increased foot traffic in the vicinity. A building in the Naebang Station ultra-station area can directly benefit from this redevelopment.
- Enhancement of Regional Status: Through redevelopment, the urban landscape of the Bangbae-dong area will be improved and the residential environment will be upgraded, further enhancing the status of the area.
Considerations During Investment: Expert Advice is Essential
Investing in small buildings can offer high potential returns, but it also involves investment risks. Particularly, investing in areas with development boosts like Bangbae redevelopment requires a more cautious approach.
- Redevelopment Project Progress: Identify the specific stage of the Bangbae redevelopment project, expected completion time, and carefully analyze the impact of these projects on the building and surrounding commercial area.
- Building Age and Utilization Plan: Although it is a new-grade building completed in 2017, if remodeling or change of use is considered in the future, relevant costs and building regulations should be checked.
- Rental Status and Vacancy Risk: The current rental status (occupancy rate, lease term, rental rates), tenant stability, and potential risk of vacancy must be carefully analyzed.
- Market Volatility: The real estate market can be affected by external factors such as interest rate fluctuations, economic conditions, and government policies. Careful judgment regarding market conditions is necessary during investment.
- Expert Advice: Investing in small buildings, especially in areas with development boosts, is complex and requires specialized analysis. It is important to seek assistance from a reliable real estate expert for thorough analysis and prudent investment decisions. An expert's advice serves as a guide towards investment success.
Detailed Transaction Analysis
Let's examine the specific transaction details of the building at Bangbae-dong 876-20, Seocho-gu.
※ Transaction Details
- Location: Seocho-gu Bangbae-dong 876-20
- Subway Station: Naebang Station (Line 7 Ultra-Station Area, Double Station Area with Bangbae Station on Line 4)
- Transaction Date: February 2025
- Sale Price: 5.5 billion Won
- Land Price (Per Pyeong): 109.73 million Won
- Land Area: 50.12 pyeong (165.7㎡)
- Building Area (Total Floor Area): 133.75 pyeong (442.16㎡)
- Zoning District: Second Class General Residential Zone
- Floors: B1F ~ 5F
- Road Condition: 4m Road
- Year of Completion: 2017.10.18
- Official Standard Land Price (공시지가): Approx. 31.91 million Won (Per Pyeong)
- Land Price Relative to Official Standard Price: Approx. 3.44 times
Past Transaction History (March 2016):
- Transaction Price: 2.275 billion Won (approx. 45.50 million Won per pyeong)
Change Compared to Past Transaction (Held for approx. 8.91 years):
- Total Capital Gain: 3.225 billion Won
- Annual Capital Gain: 361.95 million Won
- Monthly Profit: 30.16 million Won (Simple capital gain analysis)
Key Features:
- Naebang Station ultra-station area (Double)
- 5.5 billion Won transaction
- 3.225 billion Won capital gain in 9 years
- Land area 50.12 pyeong, Total floor area 133.75 pyeong
- Second Class General Residential Zone
- B1F to 5F
- Fronting a 4m road
- New-grade building completed in 2017
- Bangbae redevelopment beneficiary area
This transaction is a case where a new-grade building with a land area of approximately 50.12 pyeong and a total floor area of 133.75 pyeong (B1F to 5F) was transacted for 5.5 billion Won, at approximately 109.73 million Won per pyeong. It boasts the best locational conditions as a Naebang Station ultra-station area (Double Station Area with Bangbae Station) and is a new-grade building completed in 2017. Compared to the purchase price in 2016 (2.275 billion Won), it recorded a massive capital gain of 3.225 billion Won in just 9 years, clearly demonstrating the astonishing potential for value increase of new-grade buildings in the Bangbae-dong station area, Seocho-gu. Despite being in a Second Class General Residential Zone, its high value was recognized based on its excellent location, the marketability of a new-grade building, and its location as a Bangbae redevelopment beneficiary area, which was reflected in the high ratio of land price relative to the official standard price.
Conclusion: Seocho-gu Bangbae-dong Naebang Station Small Building, Synergy Effect of Ultra-Station Area and Redevelopment
The case study of the 5.5 billion Won new-grade small building transaction in the Naebang Station ultra-station area, Bangbae-dong, Seocho-gu, clearly demonstrates how much profit small building investment can bring when combining the power of Naebang Station as a double station area with the strong development boost of the Bangbae redevelopment project and the excellent marketability of a new-grade building. Recording a remarkable capital gain of 3.225 billion Won in just 9 years is a result of the combined effect of securing a golden location, obtaining a new-grade building, and leveraging regional development boosts.
Investing in small buildings in the Naebang Station area, Bangbae-dong, Seocho-gu, is an attractive option that offers the potential for stable rental income along with long-term asset value appreciation, based on excellent transportation accessibility, the benefit from Bangbae redevelopment, and the advantages of a new-grade building. However, it is important to carefully analyze risk factors such as understanding the progress of the redevelopment project, reviewing building utilization plans, and considering the rental status and market volatility, and make wise investment decisions with expert advice. Investing in new-grade buildings in a core area of Seocho-gu station area can be a successful investment when combined with thorough analysis and execution.