From 'Geumpo' to 'Bulsan'... Regulatory Backlash Hits Molecatching

Apartment Prices in Non-Regulated Areas of the Seoul Metropolitan Area Rise 5.99% in a Month in Gimpo
Busan Haeundae and Suyeong Districts Also See Increases... Samik Beach Up 1 Billion KRW in a Year
"Regulation-Only Approach Causes Problems... Fundamentally, Supply That Buyers Want Is Needed"

Apartment view in Haeundae-gu, Busan (Photo = Yonhap News)

[Asia Economy Reporter Kim Yuri] As the government imposed regulations on most of the Seoul metropolitan area through the June 17 real estate measures, a balloon effect is emerging in non-regulated areas such as Gimpo and Busan.

According to KB Real Estate Live On on the 5th, the apartment price increase rate in Gimpo, classified as a non-regulated area within the metropolitan area, reached 5.99% over the past month (as of October 26). The weekly increase rate was also 2.42%, the second highest nationwide after Sejong (2.94%). Considering the 10.49% increase compared to the end of last year, the recent upward trend has been clear since the June 17 measures.

According to the Ministry of Land, Infrastructure and Transport's actual transaction price disclosure system, an 84㎡ (exclusive area) apartment in Pungmu Prugio, Pungmu-dong, Gimpo-si, was sold for 759 million KRW (26th floor) on the 18th of last month, setting a record high. The highest transaction price just before the June 17 announcement was 555 million KRW. It rose by more than 200 million KRW in four months. The number of apartment transactions in Gimpo recorded 1,498 in September, the highest in the Gyeonggi region.

Busan is also rising. Busan has recently shown a steep upward trend centered on major areas such as Haeundae-gu and Suyeong-gu. Apartment prices in Haeundae-gu rose 0.9% weekly and 2.93% monthly. Suyeong-gu increased 0.6% weekly and 1.92% monthly. These figures are higher than the Seoul area’s increase rates during the same period (0.3%, 1.08%).

In fact, a 115㎡ apartment in Samik Beach, Namcheon-dong, Suyeong-gu, Busan, was traded for 1.65 billion KRW (12th floor) on the 12th of last month, setting a record high. A 131㎡ unit was traded for 1.94 billion KRW (10th floor) on the 17th of last month. Compared to the actual transaction price of 900 million KRW (2nd floor) in November last year, it rose by more than 1 billion KRW in one year. This area is attracting great interest from buyers as it plans reconstruction in major prime large complexes. An 84㎡ apartment in Haeundae Xi 2nd Phase, Haeundae-gu, was traded for 1.2 billion KRW last month. It rose by more than 400 million KRW compared to the actual transaction price (780 million KRW) in November last year. The 59㎡ unit in Gyeongnam Marina was also traded for 900 million KRW last month, rising by 150 million KRW in two months. Busan showed an upward trend centered on major areas after all regions were removed from the adjustment target areas in November last year, and it has risen further since most areas in the metropolitan area were designated as regulated areas.

In Ulsan, a non-regulated area, distinct sharp price increases are also occurring by region. An 84㎡ apartment in Munsu-ro 2nd I-Park 1st Complex, Nam-gu, Ulsan, was traded for 1.2 billion KRW (8th floor) on the 25th of last month. This was a significant increase compared to the previous highest price of 1.06 billion KRW (4th floor) the day before. As housing prices in local metropolitan cities such as Gimpo in Gyeonggi, Busan, and Ulsan surge, voices are rising on the Blue House’s public petition board and elsewhere, calling for these areas to be designated as regulated areas.

However, experts point out that pinpoint regulations, which started to curb housing prices in Seoul, have caused rapid price increases in surrounding areas, and the mole-whacking style of reapplying regulations causes price distortions. Even if the areas that were belatedly regulated return to a downward trend, damage occurs during the rapid price fluctuations, which negatively affects housing stability. Professor Kwon Dae-jung of Myongji University Graduate School of Real Estate said, "The problem has worsened because the approach was solely regulation-oriented. Fundamentally, to supply in areas where demand wants, multi-homeowners should be induced to sell their houses by lowering capital gains tax and considering such methods, but that is not the case. It is highly likely that regulations will continue in Busan, Ulsan, Daegu, and other areas."

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