'Shows No Sign of Falling'... Nationwide Land Prices Rise for 116 Consecutive Months

Land Price Change Rate and Land Transaction Volume Nationwide in Q2 2020 (Provided by Ministry of Land, Infrastructure and Transport)

[Asia Economy Reporter Chunhee Lee] Nationwide land prices have continued to rise for 116 consecutive months.

The Ministry of Land, Infrastructure and Transport announced on the 23rd that the nationwide land price increased by 0.79% in the second quarter of this year. By month, it rose 0.24% in April, 0.26% in May, and 0.30% in June, showing a continuous upward trend for 116 months since November 2010.

However, the rate of increase has somewhat decreased. It fell by 0.13 percentage points compared to 0.92% in the first quarter. Monthly, the April increase was only 0.24%, the lowest rise since February 2017's 0.23%. Nevertheless, last month it rose 0.30%, showing an upward trend above 0.3% again.

Looking at metropolitan local governments, land prices rose in all areas except Jeju Island during the first quarter. Seoul (1.02%), Gyeonggi (0.93%), and Incheon (0.91%) showed prominent increases.

In particular, Jeju Island's land prices have been falling for 14 consecutive months from May last year to last month. This is the exact opposite of 2016, when it recorded an 8.33% increase, ranking first in land price growth among nationwide metropolitan local governments. Based on the second quarter, it fell by 0.94%, with monthly declines of 0.29%, 0.21%, and 0.11% from April to June. However, the decline was somewhat reduced compared to the 0.94% drop in the first quarter.

Land Price Change Rate by City, County, and District in Q2 2020 (Provided by the Ministry of Land, Infrastructure and Transport)

By city and county, the effects of various government development plans were prominent. Hanam City in Gyeonggi Province showed the highest increase nationwide in the second quarter, with land prices rising 1.57%, influenced by the extension of Seoul Subway Line 5 and the confirmation of the Hanam Gyosan District's metropolitan transportation improvement plan.

Following that, Gwacheon City in Gyeonggi Province rose 1.48%, ranking second in growth, influenced by the creation of the Knowledge Information Town and the Gwacheon District metropolitan transportation improvement plan. Areas under the influence of new government housing site developments and the metropolitan express railroad (GTX), such as Sujeong District in Seongnam, Gyeonggi (1.33%), Namyangju City, Gyeonggi (1.29%), and Gangnam District, Seoul (1.28%), showed particularly high growth rates.

On the other hand, Jeju's Seogwipo City (-0.66%) and Jeju City (-0.59%) ranked first and second in decline rates. It is analyzed that the decrease in tourists and weakened buying sentiment due to the spread of COVID-19 affected this. The third to fifth highest decline rates were found in Dong District, Ulsan (-0.28%), Tongyeong City, Gyeongnam (-0.10%), and Jinhae District, Changwon City (-0.07%), all experiencing contraction in foundational industries. Although there were some signs of recovery amid the downturn in shipbuilding and manufacturing industries, uncertainty continued to cause cautious or declining trends.

The total land transaction volume in the second quarter of this year was about 805,000 parcels, covering an area of 516.2 km², equivalent to 0.9 times the area of Seoul. This was a 7.6% (66,147 parcels) decrease compared to the first quarter. However, transaction volume has been increasing since May, with June showing a 36% increase compared to the previous month, indicating a rising trend.

By transaction type, pre-sale right transactions decreased by 46,000 parcels compared to the same period last year, showing a 21.8% decline. Sales transactions also decreased by 5.1% (28,000 parcels). However, these also began to rise again from May. In particular, sales transactions slightly dropped from 189,000 parcels in March to 146,000 parcels in April but surged to 223,000 parcels last month.

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