Soaring Apartment Prices in Gimpo and Busan... Government Finally Designates Them as 'Adjustment Target Areas'

KB Kookmin Bank Weekly Housing Market Trend Report
Rapid House Price Increase in Gimpo, Busan Haeundae-gu, Daegu, etc.
Government to Designate Adjustment Areas Today... Ulsan Excluded

[Image source=Yonhap News]

[Asia Economy Reporter Moon Jiwon] Apartment sale prices in non-regulated areas such as Gimpo in Gyeonggi Province and Haeundae-gu in Busan have surged. The government designated many non-regulated areas, where housing prices have recently risen sharply, as adjustment target areas after deliberation by the Residential Policy Deliberation Committee on the same day.

Gimpo and Busan Apartment Prices Surge... Balloon Effect in Non-Regulated Areas

According to the weekly KB Housing Market Trends data released by KB Kookmin Bank Real Estate Live On on the 19th, as of the 16th, apartment sale prices in Gimpo rose 2.28% compared to the previous week, and in Haeundae-gu, Busan, they rose 1.91%.

This is a high increase rate of about 2%. Busan was removed from the adjustment target areas in November last year, and compared to regulated areas such as the metropolitan area, it has been subject to looser regulations on loans, subscription, and taxation, concentrating buyer sentiment.

Gimpo was also excluded from regulation when most areas in the metropolitan area were designated as adjustment target areas during the June 17 measures, causing a significant rise in housing prices due to the 'balloon effect.' Its relatively close proximity to Seoul and weaker regulations have increased its investment appeal.

Supported by Gimpo's upward trend, apartment sale prices in Gyeonggi Province also rose 0.43% compared to the previous week, increasing the rise from the previous week (0.30%). Paju (0.74%), Goyang Deogyang-gu (0.72%), Uiwang (0.71%), and Namyangju (0.69%) also saw relatively high increases.

Buyer dominance indices in Daegu, Daejeon, and Ulsan also exceeded 100, showing signs of recovering buyer sentiment. Apartment sale prices rose in all five major metropolitan cities: Busan (1.02%), Ulsan (0.74%), Daegu (0.42%), Daejeon (0.33%), and Gwangju (0.17%).

Government Finally Designates Regulated Areas... Gimpo, Busan, Daegu

The Ministry of Land, Infrastructure and Transport designated Gimpo, Busan's Haeundae, Suyeong, Dongnae, Yeonje, and Nam districts, and Daegu's Suseong-gu as new adjustment target areas after deliberation by the Residential Policy Deliberation Committee. The designation takes effect from the 20th.

In Gimpo's case, the surge in housing prices due to the GTX-D transportation benefit and increased investment by outsiders was considered as the overheating intensified. However, the government excluded Tongjin-eup, Wolgot-myeon, Haseong-myeon, and Daegot-myeon in Gimpo, where price increases were small, from the adjustment target areas.

In Busan's Haeundae-gu, transaction volume is more than three times that of the same month last year, and the proportion of purchases by special entities such as outsiders and corporations is increasing recently. Adjacent districts Suyeong, Dongnae, Yeonje, and Nam are also experiencing severe overheating.

In Daegu, investment demand centered on Suseong-gu has increased, expanding the rise since August. Although Suseong-gu was designated as a speculative overheating district in September 2017, it was not an adjustment target area, so tax regulations such as capital gains tax surcharges for multiple homeowners were not applied.

On the other hand, Ulsan, Cheonan, Changwon, and other areas where housing prices are rising were not included in this regulation. The Ministry of Land said, "Considering the price decline trend in these areas that continued until last year, they were not designated as adjustment target areas this time," and added, "If overheating concerns intensify, immediate designation will be considered."

Minister of Land, Infrastructure and Transport Kim Hyun-mi is announcing support measures for housing stability for low-income and middle-class citizens at the government Seoul office briefing room on the 19th. (Photo by Yonhap News)

Will Seoul Sales Revive?... Buyer Dominance Index Jumps

Meanwhile, Seoul apartment sale prices rose 0.29%, similar to last week's 0.30%. Increases were notable mainly in mid-to-low price complexes such as Gwanak-gu (0.50%), Yeongdeungpo-gu (0.48%), Eunpyeong-gu (0.44%), Nowon-gu (0.44%), and Jung-gu (0.42%).

Seoul's buyer dominance index also rose significantly from 81.1 last week to 90.2. This is interpreted as a slight increase in the buyer dominance index as buyer inquiries gradually increased while seller inquiries slowed down again.

Apartment jeonse (long-term lease) prices are also continuing their upward trend.

National apartment jeonse prices rose 0.35% compared to the previous week, expanding the increase. Seoul apartment jeonse price growth also expanded from 0.46% to 0.53% this week.

Clear rises were seen in Yeongdeungpo-gu (1.15%), Gwanak-gu (1.13%), Songpa-gu (0.92%), Mapo-gu (0.63%), and Dongjak-gu (0.62%), with no areas showing declines.

Apartment jeonse prices in Gyeonggi Province also rose 0.40% compared to the previous week due to increases in Gimpo and Guri. Incheon (0.30%) also rose compared to the previous week. In Gyeonggi, Gimpo (1.45%), Guri (1.08%), Uiwang (0.97%), Gwangju (0.97%), and Goyang Deogyang-gu (0.84%) saw high increases.

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