Heated Up After Being Hit... Non-Regulated Regions

Record-Breaking Subscription Competition Rate in Gangneung Balloon Effect
Attention on Pohang Buk-gu, Not Designated as Adjustment Target

[Image source=Yonhap News]

[Asia Economy Reporter Donghyun Choi] Since the beginning of the year, a balloon effect has been prominent in non-regulated local areas such as Gangneung in Gangwon and Pohang in Gyeongbuk. Large crowds are flocking to apartment subscription applications, and apartment and land prices are also soaring accordingly.

According to the Korea Real Estate Board's Subscription Home on the 14th, the 1st priority subscription result for ‘Gangneung Xi Fine Venue’ in Naegok-dong, Gangneung recently saw 7,260 applicants for 552 units, recording an average competition rate of 13.15 to 1. This is the first time since 2000 that a double-digit competition rate has appeared in the 1st priority subscription for apartments supplied in Gangneung. In fact, among the nine complexes supplied in Gangneung over the past three years, seven experienced undersubscription.

House and land prices are also rising in the Gangneung area. In terms of land prices, the increase is steep, especially around coastal commercial districts. According to the Korea Real Estate Board’s nationwide land price fluctuation statistics, land prices in Gangneung rose by 2.49% from January to November last year, ranking third among 18 cities and counties in Gangwon, following Yangyang (2.67%) and Sokcho (2.63%). In particular, during the same period, land prices in Chodang, Gangmun, Songjeong, and Gyeonso-dong?areas with sea views and caf? streets?surged by more than 5%. A representative from real estate agency A in Gyeonso-dong said, "Until just before social distancing was strengthened due to the spread of COVID-19, land prices near Anmok Beach caf? street exceeded 40 million KRW per 3.3㎡," adding, "More outsiders are visiting."

Pohang is experiencing a similar atmosphere. Recently, ‘Heunghae Sohee Star Hills The Castle’ in Heunghae-eup, Buk-gu, Pohang attracted a total of 3,314 applicants for special supply and 1st priority subscription. This is the highest number of applicants among eight complexes supplied in the area over the past three years. Last month, ‘Yanghak Shinwon Achim City Quensia’ in Buk-gu, Pohang recorded a 1st priority competition rate of 22.39 to 1. Apartment prices have also been soaring recently. According to the weekly apartment price increase rate by the Korea Real Estate Board (as of the 4th), Buk-gu, Pohang rose by 0.57%, ranking second among all cities and counties in the Yeongnam region, following Yangsan (0.64%). The ‘Royal Park City Jangseong Prugio’ in Jangseong-dong, Buk-gu, which moved in last January, was sold last month for 520 million KRW for an 84㎡ (exclusive area), surpassing 500 million KRW for the first time. This price is 200 million KRW higher than the original sale price.

Industry insiders attribute the overheating of the real estate market in these areas to the balloon effect toward non-regulated regions. An industry official said, "Gangneung’s development expectations increased around the 2018 Pyeongchang Winter Olympics, but it remains a non-regulated area," adding, "In Pohang, only Nam-gu was designated as a regulated area last month, so Buk-gu is gaining attention."

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