Regions Avoiding the June 17 Regulations Face Ongoing Balloon Effect

Gyeryong, Sejong·Daejeon Accessibility Improved
Apartment Prices Up 4.09% in One Month

Sejong Ranks 2nd Nationwide with 7.55% Increase
Gimpo in Seoul Metropolitan Area 3rd at 3.77%

Non-Regulated Metropolitan Cities' Housing Prices Fluctuate
Busan 84㎡ Units Frequently Sold Over 1 Billion KRW

[Asia Economy Reporter Lee Chun-hee] More than a month has passed since the government designated most areas in the Seoul metropolitan area, as well as Daejeon and Cheongju in Chungbuk, as regulated zones through the June 17 real estate measures, but the balloon effect continues to push demand into non-regulated provincial areas.

According to the Korea Real Estate Board on the 20th, as of the 13th, the apartment sales price index in Gyeryong City, Chungnam, rose by 0.60% compared to the previous week, reaching 101.5. This is the second highest increase nationwide, following Sejong, which rose by 1.46%.

Gyeryong City was identified as a representative balloon effect area, jumping 1.20% on the 22nd of last month, right after the June 17 measures were announced. Since then, prices have risen 4.06% in just one month, ranking second after Sejong’s 7.55% increase.

The industry analyzes that the sudden designation of all areas in Daejeon, which had previously been free from regulations, as regulated zones has led to a surge in demand to avoid regulations in Gyeryong, which has good accessibility to Sejong and Daejeon. In fact, an 84㎡ (exclusive area) apartment in Gyeryong The Sharp, Duma-myeon, was traded for 300 million KRW for the first time on the 28th of last month, right after the measures. Considering it was traded for 250 million KRW on the 28th of the previous month, the price surged by a remarkable 20%.

Price surges are also seen in areas near regulated zones or in non-regulated provincial metropolitan cities such as Gimpo City in Gyeonggi (0.38%), Busanjin-gu (0.33%) and Suyeong-gu (0.30%) in Busan, Cheonan City in Chungnam (0.31%), and Chungju City in Chungbuk (0.27%).

In particular, Gimpo showed the third highest increase nationwide, rising 3.77% over four weeks after the measures, following Sejong and Gyeryong. A 59.33㎡ unit in Hangang New Town Bando Yubora 2nd Phase in Unyang-dong was traded for 449 million KRW on the 8th, setting a new record price. Before the announcement of the measures last month, this housing was traded in the range of 360 to 370 million KRW. This complex, with a total of 1,498 households, has already registered 133 actual transactions since the 17th of last month. Considering the 30-day grace period for registering actual transactions, the number is likely to increase further.

A representative from real estate agency A in Unyang-dong said, "Since the government does not regulate this area immediately, both actual residence demand and gap investment demand inevitably concentrate here," adding, "Inquiries are still continuing these days."

A large apartment complex in Unyang-dong, Gimpo-si, Gyeonggi Province. (Photo by Im On-yu)

Balloon Effect Also Seen in Provincial Metropolitan Cities... Busan’s 84㎡ Apartments Surpass 1 Billion KRW in Record Price Rally

The balloon effect is also appearing in metropolitan cities. At the time of the announcement of the measures, the government designated only Daejeon as a regulated area despite rising housing prices across provincial metropolitan cities, raising concerns among market participants that balloon effects would occur in non-regulated metropolitan cities such as Busan and Daegu. These concerns are now materializing.

In Busan, transactions of 84㎡ apartments priced over 1 billion KRW are occurring one after another. An 84㎡ unit in Gwang-an Xi, Gwang-an-dong, Suyeong-gu, scheduled for move-in this October, was traded for 1.03 billion KRW on the 13th. This is the first transaction over 1 billion KRW recorded in this complex. On the 16th of last month, it was traded for 839 million KRW, but the price jumped nearly 200 million KRW in one month.

Other complexes such as Namcheon The Sharp Prestige in Namcheon-dong, Suyeong-gu, Ssangyong Yega The Ocean in Gwang-an-dong, Suyeong-gu, and Daewoo Marina 1st Phase in U-dong, Haeundae-gu, have also recorded new high prices exceeding 1 billion KRW after the June 17 measures.

The government explained that the 'Joint On-site Inspection Team for the Real Estate Market,' which began operating on the 15th, is focusing on cracking down on acts that disrupt real estate transaction order and illegal brokerage activities, mainly targeting brokerage offices in overheated areas of the Seoul metropolitan area such as Gimpo, Gwangmyeong, and Guri, where overheating is a concern, stating that "planned investigations will be conducted to detect speculative activities and illegal transactions."

However, the industry responds that patchwork measures that only increase regulated areas will inevitably continue the balloon effect. An industry insider pointed out, "Haeundae-gu, Suyeong-gu, and Dongnae-gu in Busan were areas that the government lifted from the adjusted target areas last year citing housing price stabilization," adding, "Repeating designation and lifting of regulated areas will only cause continuous side effects."

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