Land Prices 'Rising Alone', Increasing for 113 Consecutive Months

0.92% Increase in Q1, Monthly Rise Continues for 113 Consecutive Months Since November 2010
Growth Rate Slightly Reduced Due to COVID-19 Spread

Trading Volume Also Declines Mainly in Areas with High COVID-19 Cases

(Provided by Ministry of Land, Infrastructure and Transport)

[Asia Economy Reporter Lee Chun-hee] Amid the sluggish real estate market due to the spread of the novel coronavirus infection (COVID-19) and government policy impacts, land prices continued their 'solo rise' for 113 consecutive months. However, the rate of increase has somewhat slowed due to COVID-19.

The Ministry of Land, Infrastructure and Transport announced on the 27th that nationwide land prices rose by 0.92% in the first quarter of this year. Monthly, the increases were 0.33% in January, 0.32% in February, and 0.27% in March, marking a continuous rise for 113 months since November 2010.

However, the rate of increase has somewhat decreased. Compared to 1.01% in the fourth quarter of last year, it dropped by 0.09 percentage points. Monthly increases have also been above 0.3% consecutively since March 2019, so last month's rise appears to have slowed somewhat.

The Ministry attributed this slowdown in the rate of increase to COVID-19, especially noting the sharp rise in confirmed cases since February as a contributing factor. In fact, while all regions nationwide maintained an upward trend in land price changes, the rate of increase in March slowed compared to the previous month.

▲ Monthly Land Price Change Rates in Major Confirmed Areas (Provided by the Ministry of Land, Infrastructure and Transport)

By region, land prices rose in all areas except Jeju Island during the first quarter. Notable increases were seen in Daejeon (1.33%), Seoul (1.23%), and Sejong (1.16%).

In particular, Jeju Island has experienced a decline in land prices for 11 consecutive months from May last year through last month. This is the exact opposite of 2016, when it recorded a remarkable 8.33% increase, ranking first among metropolitan local governments nationwide in land price growth. For the first quarter, it fell by 0.94%, with monthly declines of 0.31%, 0.31%, and 0.32% from January to March. A Ministry official stated, "The decrease in inbound population and visitors due to the impact of COVID-19 appears to be the reason for this change."

By city and district, Seongnam-si Sujeong-gu (1.92%), Hanam-si (1.84%), Gwangmyeong-si (1.83%), Seongnam-si Jungwon-gu (1.65%), and Gwacheon-si (1.59%) ranked first to fifth in growth rates. The Ministry analyzed that redevelopment and reconstruction projects acted as positive factors in Seongnam-si and Gwangmyeong-si, while the extension opening of Seoul Subway Line 5 in Hanam-si and the development of the Knowledge Information Town in Gwacheon-si boosted land prices.

On the other hand, Jeju's Seogwipo-si (-0.95%) and Jeju-si (-0.93%) ranked first and second in decline rates. The third to fifth places in decline rates were Ulsan Dong-gu (-0.29%), Changwon-si Uichang-gu (-0.28%), and Seongsan-gu (-0.24%), all of which are experiencing contraction in foundational industries. Although there were some signs of recovery amid the downturn in shipbuilding and manufacturing industries, ongoing uncertainty led to continued stagnation or decline.

Land Transaction Volume Change Rate by Province in Q1 2020 Compared to the Same Period Last Year (Provided by the Ministry of Land, Infrastructure and Transport)

In the first quarter of this year, the total land transaction volume was 871,000 parcels, covering an area of 488.7 km², which is about 0.8 times the area of Seoul. Compared to the same period last year, this represents an increase of 29.5% (198,206 parcels), and a 3.0% (25,557 parcels) increase compared to the fourth quarter of last year.

By transaction cause, sales increased by 195,435 parcels compared to the same period last year, showing a 55.2% growth rate. In particular, residential land transactions increased by 180,448 parcels, accounting for 91% of the total increase in land transactions.

Although land transaction volumes increased quarterly, monthly figures showed a decline in February and March. Except for Jeju (-15.3%), Ulsan (-10.4%), and Gyeongbuk (-4.4%), all metropolitan local governments saw an increase in transaction volumes compared to the same period last year. Notably, Seoul (81.1%), Incheon (65.5%), and Sejong (53.8%) experienced significant increases.

However, starting last month, nationwide land transactions decreased to 281,618 cases, down 8.1% from 306,397 cases in the previous month, indicating market contraction. Particularly, Daegu and Gyeongbuk, which recorded the highest number of confirmed cases nationwide with 6,704 and 1,302 cases respectively as of the 1st, saw transaction volumes drop by 40.4% and 14.3% compared to the previous month.

This content was produced with the assistance of AI translation services.