"Balloon Effect Raises Prices by 100 Million"…Gimpo, Cheonan, and Busan Housing Prices 'Soar'

Gimpo Apartment Prices Rise by 100 Million Won Since Early Year
Side Effects of 'Balloon Effect' Due to Increased Regulations
Paju Also Sees Continued Price Increases Mainly in Specific Complexes
Housing Prices Not Stable Yet... Upward Trend Expected to Continue

[Asia Economy Reporters Inho Yoo, Mune Won, Chunhee Lee] The government's expansion of regulated areas is once again leading to a balloon effect. Since designating 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, apartment prices in non-regulated areas have soared, and apartment pre-sale rights that avoided resale restrictions are being traded with premiums worth hundreds of millions of won.

According to the Ministry of Land, Infrastructure and Transport's actual transaction price disclosure system and the Korea Real Estate Board on the 23rd, apartment prices in Gimpo and Paju in Gyeonggi Province and Cheonan in Chungbuk, which escaped the June 17 regulations, have recently shown a sharp upward trend. Experts analyze that this is because a significant portion of jeonse (long-term deposit lease) demand in the metropolitan area is shifting to purchase demand in relatively cheaper non-regulated areas due to the rapid rise in jeonse prices.

Demand Concentrates in Gimpo and Paju... "Asking Prices Soar"

The area where the balloon effect is most prominent is around Gimpo City. Since June 22, the cumulative increase rate of apartment prices in this area has reached 6.09%.

Transactions are also increasing. According to the Apartment Actual Transaction Price (Asil) app, as of this date, the number of apartment sale listings in Gimpo decreased by 63.1%, from 9,403 to 3,470, over three months.

An 84.97㎡ (exclusive area) unit in Hangang Central Xi 2 Complex in Janggi-dong, Gimpo, was sold on the 11th of this month for 483 million KRW. Compared to February this year, this is an increase of 103 million KRW. Most other units in this apartment complex also rose by around 100 million KRW compared to the beginning of the year.

An 84㎡ unit in Hangang Metro Xi 2 Complex in Geolpo-dong, after being traded for 764.4 million KRW on the 10th of last month, now has asking prices soaring to between 890 million and 950 million KRW.

The representative of real estate agency A in Janggi-dong said, "There are currently no listings below 600 million KRW for 84㎡ units," adding, "As more people look for listings, asking prices have risen by about 100 million KRW."

Some complexes in Paju Unjeong New Town are also experiencing rapid price increases. An 84.96㎡ unit in Hillstate Unjeong, Mokdong-dong, was traded for 690 million KRW on the 28th of last month. This apartment was traded for 550 million KRW only until the beginning of the year.

Cheongju, Genie, and Cheonan Rise... Busan Also Shows Sharp Increase

The balloon effect is also continuing in provincial areas.

Apartment prices in Cheonan City, Chungnam, have risen cumulatively by 3.79% since the June 17 measures. This is a complete turnaround from last year's 1.57% decline.

The pre-sale rights for 'Cheonan Prugio Lakeside,' supplied in the Seongseong 2 District in August, carry premiums of up to 200 million KRW. The current pre-sale price for an 84㎡ unit, which had a pre-sale price in the low 400 million KRW range, has risen to as high as 616 million KRW.

The 'Administrative Town Central Doosan We've,' which was supplied last month, also has a premium of 150 million KRW on the 84㎡ terrace-type units. This atmosphere in Cheonan is the exact opposite of that in Cheongju, Chungbuk, which is designated as a regulated area. Apartment transaction volume in Cheongju has decreased by 53.7% since being designated as a regulated area.

According to Korea Real Estate Board statistics, the transaction volume in this area was 7,206 cases (including pre-sale rights resale) from March to May, but shrank to 3,335 cases from July to September. The rate of price increase also slowed from 3.78% in June to 0.95% in July, 0.14% in August, and turned negative at -0.05% in September.

Busan, which remains a regulation-free zone, is also experiencing a sharp rise day by day. Suyeong-gu in Busan recorded the highest nationwide price increase rate of 0.66% compared to the previous week as of the 19th.

The representative of real estate agency B in this area said, "Along with Haeundae-gu, Suyeong-gu is leading the rise in Busan housing prices, and there is even talk that if Seoul has 'Gangnam's invincibility,' Busan has 'East Busan's invincibility.'"

In fact, an 84㎡ unit in Suyeong Hyundai, Suyeong-dong, Suyeong-gu, was traded for 1.005 billion KRW on the 9th of last month, joining the '1 billion club.' This is more than 100 million KRW higher than the previous highest price of 870 million KRW in August, rising by over 100 million KRW in just one month. An 84㎡ unit in Daewoo Marina 1st Complex in U-dong, Haeundae-gu, was also traded for 1.25 billion KRW last month. This is nearly a 40% increase from the 900 million KRW level in June, in just four months.

A real estate industry insider diagnosed, "The strong housing prices in areas that escaped regulation mean that government policies have still not dampened investment sentiment in the real estate market."

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