Yaksu Station Main Street 8.1 Billion Won Small Building: Loss in 3 Years, Direct Hit from Interest Rate Hike?

Yaksu Station Main Street 8.1 Billion Won Small Building: Loss in 3 Years, Direct Hit from Interest Rate Hike?

A small building located on the main street near Yaksu Station in Sindang-dong, Jung-gu, Seoul, was transacted at a loss of 350 million Won in just 3 years. Did the impact of interest rate hikes and the real estate market downturn affect the small building market as well? Let's analyze the transaction details and the reasons for the loss of the Sindang-dong small building transacted for 8.1 billion Won, and examine points to be aware of when investing in real estate.

Yaksu Station 8.1 Billion Won Small Building, Loss Transaction in 3 Years

In February 2025, a small building located at 292-46 Sindang-dong, Jung-gu, Seoul, was sold for 8.1 billion Won. This building had been transacted for 8.45 billion Won in December 2022, recording a loss of 350 million Won in approximately 3 years. This means an annual loss of 116.67 million Won and a monthly loss of 9.72 million Won occurred over 3 years.

Transaction Information:

• Location: 292-46 Sindang-dong, Jung-gu, Seoul
• Subway Station: Yaksu Station
• Transaction Date: February 2025
• Sale Price: 8.1 billion Won
• Land Area: 107.99 pyeong (357㎡)
• Zoning District: Quasi-Residential Zone
• Floors: 4 stories above ground
• Road Condition: 5-lane road
• Year of Completion: October 12, 1966

Transaction Details:

• December 2022: 8.45 billion Won sale
• February 2025: 8.1 billion Won sale
• Loss Amount: 350 million Won

Impact of Interest Rate Hikes and Real Estate Market Downturn on the Small Building Market

The loss incurred in this transaction is analyzed as primarily due to interest rate hikes and the real estate market downturn. The decrease in real estate investment demand caused by rising interest rates and the drop in building sale prices led to the loss. Additionally, the increase in new construction costs, which decreased the value of older buildings, also played a role.

Reasons for Loss:

• Decrease in real estate investment demand due to interest rate hikes
• Drop in building sale prices due to real estate market downturn
• Decrease in the value of older buildings due to increased new construction costs
• Acquisition tax, incidental costs, financial costs

Small Building Investment Requires Careful Approach

This case suggests that a cautious approach is necessary when investing in small buildings. Investment decisions should be made by comprehensively considering various factors such as interest rates, real estate market trends, and building age. Especially during periods of rising interest rates, it is important to carefully assess the investment yield and select a building that can secure stable rental income.

Points to Consider for Investment:

• Analyze investment environment, including interest rates and real estate market trends
• Evaluate building value, including building age and rental yield
• Review the possibility of securing stable rental income
• Consider financial costs, taxes, and other incidental costs

For Small Building Investment, Expert Assistance is Important

Small building investment requires more specialized knowledge and experience than general real estate investment. It is important to seek assistance from a real estate expert to plan your investment and minimize investment risks.

The building at 292-46 Sindang-dong, Jung-gu, was sold in February 2025.

※ Transaction Details

• Location: 292-46 Sindang-dong, Jung-gu
• Subway Station: Yaksu Station
• Transaction Date: February 2025
• Sale Price: 8.1 billion Won
• Land Price (Per Pyeong): 75.01 million Won
• Land Area: 107.99 pyeong (357㎡)
• Building Area: 153.29 pyeong (506.74㎡)
• Zoning District: Quasi-Residential Zone
• Floors: 4 stories above ground
• Road Condition: 5-lane road
• Year of Completion: October 12, 1966
• Official Standard Land Price (공시지가): Approx. 33.95 million Won
• Land Price Relative to Official Standard Price: Approx. 2.21 times

※ Past Transaction History

• December 2022: 8.45 billion Won sale (78.24 million Won per pyeong)
• February 2025: 8.1 billion Won sale (75.01 million Won per pyeong) (Held for approx. 3 years)
• 3 years: 350 million Won loss on sale
• Annual: 116.67 million Won loss on sale
• Monthly: 9.72 million Won loss (Simple capital gain/loss analysis only)