Busan, Gimpo Housing Prices Soar... Government Considers Designating 'Adjustment Target Areas'

KB Kookmin Bank Housing Market Trend Report Released
Concerns Over Regional Metropolitan Cities Like Busan and Non-Regulated Areas
Kim Hyun-mi "Monitoring Closely"... Additional Regulations Expected

[Image source=Yonhap News]

[Asia Economy Reporter Moon Jiwon] As apartment prices have recently surged mainly in provincial metropolitan cities such as Busan and Daegu, as well as some non-regulated areas, the nationwide real estate market is becoming unstable again.

Since the government recently stated that it is closely monitoring areas where housing prices have risen due to speculative capital movement, there is speculation that Busan and Gimpo may soon be designated as regulated areas.

According to the weekly KB Housing Market Trend data released by KB Kookmin Bank’s Real Estate Live On on the 12th, as of the 9th, apartment buying sentiment is reviving in some provincial metropolitan cities including Busan.

Non-regulated area Busan... Buying sentiment grows

Busan’s buyer dominance index rose from 85.9 last week to 95.9 this week, and Daegu (105.3→108.9), Daejeon (100.3→103.8), and Ulsan (82.9→107.1) also showed an increasing trend in buying sentiment.

The buyer dominance index ranges from 0 to 200, and a value exceeding 100 means "there are more buyers."

Looking at the rate of price increase, Busan (0.68%), Ulsan (0.52%), Daegu (0.43%), Daejeon (0.41%), and Gwangju (0.23%) all rose relatively significantly.

In particular, in Busan, buying demand has strengthened since all areas were removed from the adjusted target areas in November last year. Compared to Seoul and other metropolitan areas, regulations on loans and taxes are weaker, leading to an analysis that speculative capital is moving there.

In Gyeonggi-do (0.30%), apartment prices rose significantly centered on the non-regulated area of Gimpo (0.85%). As the jeonse (long-term lease) shortage in Seoul worsened, buying demand has concentrated in Gimpo, which is still relatively affordable in the metropolitan area.

Accordingly, Minister of Land, Infrastructure and Transport Kim Hyun-mi said at the National Assembly Budget and Accounts Committee plenary session on the 10th, "There is a concentration phenomenon where speculation occurs by avoiding regulated areas, causing excessive housing price increases in some regions, so we are closely monitoring the situation."

The market expects that Busan and Gimpo may soon be included in the adjusted target areas.

Besides these, apartment prices rose significantly in Goyang Ilsandong-gu (0.63%), Goyang Deogyang-gu (0.58%), Paju (0.56%), and Yongin Suji-gu (0.40%), while Dongducheon (-0.05%) and Gwacheon (-0.01%) declined.

Minister of Land, Infrastructure and Transport Kim Hyun-mi is responding at the plenary meeting of the Special Committee on Budget and Accounts held at the National Assembly in Yeouido, Seoul, on the 9th. (Photo by Yonhap News)

Seoul mid-to-low price rise... "Buying instead of soaring jeonse"

Seoul apartment prices rose 0.30% this week, showing a similar increase to last week (0.33%). The rise was larger in mid-to-low price complexes such as Eunpyeong-gu (0.90%), Jung-gu (0.77%), Seongdong-gu (0.66%), Dobong-gu (0.43%), and Nowon-gu (0.40%) than in the Gangnam area.

It is analyzed that due to the government's new lease law enforcement and the low interest rate effect, the recent spread of the jeonse shortage has led to a growing perception of "let’s buy even mid-to-low price apartments."

However, since the burden of property tax has increased significantly and buying demand for high-priced complexes has weakened considerably, Seoul’s buyer dominance index has remained in the 80s for seven consecutive weeks.

Jeonse shortage continues... When will the government’s measures come out?

Jeonse prices in Seoul, the metropolitan area, and provinces continue to rise.

Seoul apartment jeonse prices rose 0.46% this week, down from 0.70% last week, but the upward trend remains. Jung-gu (0.89%), Songpa-gu (0.79%), Seongdong-gu (0.74%), Eunpyeong-gu (0.73%), and Seongbuk-gu (0.67%) showed high increases, and there were no areas with declines.

The rise continued in Gyeonggi-do and Incheon as well. Gyeonggi-do apartment jeonse prices rose 0.42% from the previous week, driven by high increases in Anyang Dongan-gu (1.01%) and Goyang Ilsandong-gu (0.96%).

In Incheon (0.35%), prices rose more than the previous week in Namdong-gu (0.68%), Bupyeong-gu (0.55%), Dong-gu (0.48%), and Yeonsu-gu (0.46%).

Jeonse prices also rose in Ulsan (0.49%), Busan (0.35%), Daejeon (0.30%), Daegu (0.29%), and Gwangju (0.21%).

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