"Waking Up to Higher House Prices"... Sejong City Also Sees 3040 'Yeongkkeul Buying'

Sejong 3040 Apartment Purchase Share Rises... 56.1% in July
Non-Residents' Purchase Share Also Increases... "Sejong Ignites as Seoul Fails to Attract"

[Image source=Yonhap News]

[Asia Economy Reporter Onyu Lim] Mr. A, a man in his 30s who was living in a jeonse lease in Dajeong-dong, Sejong City, recently purchased an apartment in Gajae Village 2 Complex, Jongchon-dong, nearby, for over 500 million KRW by borrowing as much as possible. He said, "I get anxious because the house prices rise every day." He had been waiting for the special supply for first-time homebuyers but was not confident about winning, and the soaring house prices following discussions about relocating the administrative capital made him impatient. The apartment he bought has continued to rise sharply, with the current actual transaction price reaching up to 630 million KRW. Mr. A said, "When I think about what would have happened if I hadn't bought the house by stretching myself, I even get dizzy."

Following the controversy over relocating the administrative capital, there is an analysis that the rise in house prices around Sejong City is due to 'panic buying' by people in their 30s and 40s. According to statistics from the Korea Real Estate Board, apartment prices in Sejong City surged by an average of 9.2% in August alone, recording the highest increase nationwide. The cumulative apartment price increase this year has reached a staggering 34%.

According to the Korea Real Estate Board's "Monthly Buyer Age Group Status" on the 3rd, the number of apartment purchases by people in their 30s and 40s in Sejong in July was 883 cases in total. This accounts for 56.1% of the total 1,575 cases, far exceeding half. The proportion, which was 52.8% in May, rose to 54.6% in June and continues to increase in July.

July was the period when discussions about relocating the administrative capital became active, and the apartment price increase rate in Sejong City reached 6.53%. It is possible to analyze that the buying spree of people in their 30s and 40s had a significant impact on the rapid rise in house prices in Sejong City. A representative from B Real Estate Agency in Saerom-dong, Sejong City (hereafter referred to as the agent) said, "As the house price rise became more pronounced, many young government official couples are trying to increase their floor space or move to better places." He added, "The panic buying learning effect seen in Seoul is also observed in Sejong City."

The influx of buyers from outside the area is also continuing. In July, transactions from outside the jurisdictional city and province in Sejong City clearly increased. The proportion of purchases by outsiders, which was 38.2% in May, rose to 40.5% in June and further increased to 43.4% in July. In July, out of 1,575 cases, 684 were purchases by outsiders. This is why there is criticism that the discussion about relocating the administrative capital, which was raised to stabilize Seoul's housing prices, only triggered speculation in Sejong City.

Due to the rapid rise in house prices, transactions exceeding the mortgage loan ban threshold of 1.5 billion KRW have been reported for the first time in Sejong City. Last month, a 109㎡ unit (exclusive area) in Horyeoul Village 10 Complex, Boram-dong, was sold for 1.57 billion KRW. There are also complexes in the '1 billion KRW club' where 84㎡ units have sold for over 1 billion KRW. Saetteum Village 11 Complex in Saerom-dong changed hands for 1.1 billion KRW in July. Many complexes have seen price increases close to 100 million KRW within just a month or two. In June, an 84㎡ unit in Saesaem Village 1 Complex, Sodam-dong, was sold for 700 million KRW but was traded for 850 million KRW last month. The actual transaction price of a 59㎡ unit in Gaon Village 6 Complex, Dajeong-dong, rose from 500 million KRW in June to 650 million KRW in August.

Experts expect the upward trend in house prices to continue for the time being, as the supply of new housing units in Sejong City is not large. The number of new housing units in Sejong City was 12,289 last year, and is expected to be 5,632 this year, 7,668 in 2021, and 2,157 in 2022. An industry official said, "As Daejeon and Cheongju have been designated as government-regulated areas, demand is increasingly concentrated in Sejong City."

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