[Real Estate Investment] Balloon Effect Reaches Neglected Cities... 'Non-Regulated Areas' Gain Popularity

House Prices Surge in Gimhae, Yangsan, Asan, etc.
Balloon Effect as Government Suppresses Regulated Areas

Apartment complexes lined up across Gokgyocheon in Asan-si, Chungnam

With the government's successive expansion of regulated areas, apartments in small and medium-sized provincial cities that had been relatively neglected are now gaining attention. There is a balloon effect where investment demand is shifting to places where housing prices are affordable and barriers such as subscription, transactions, and loans are low. Non-regulated areas, which are not designated as speculative overheated zones or adjusted target areas, are even being called "promising investment destinations" by the government.

◆House Prices Soaring in Gimhae, Yangsan, and Asan = Apartment prices in major provincial cities in non-regulated areas continue to skyrocket. In December last year, the government designated 37 areas, including four metropolitan cities?Busan, Daegu, Gwangju, and Ulsan?as well as Paju in Gyeonggi Province, Cheonan in Chungnam, and Changwon in Gyeongnam, as adjusted target areas or speculative overheated zones. However, housing prices are soaring in areas outside these zones.

Representative examples include Gimhae and Yangsan, adjacent to Busan and Changwon, and Asan, near Cheonan. According to the Ministry of Land, Infrastructure and Transport's real transaction disclosure system, the 84㎡ (16th floor, exclusive area) pre-sale right for "Gimhae Prugio High-End Phase 1," which was sold in July last year, was traded for 432.9 million KRW last month. This price includes a premium of over 50 million KRW compared to the pre-sale price of 377 million KRW six months ago. The "Gimhae Centum Doosan We've the Zenith" 84.98㎡ unit was traded at a record high of 497 million KRW (21st floor) in December last year. Considering that the same size was traded for 339 million KRW (18th floor) in January last year, the price increased by about 46.6% in about a year.

The rising trend in housing prices in Yangsan, which borders Busan, Ulsan, and Gimhae, is also notable. According to KB Real Estate Live On data, as of November, the average apartment price per 3.3㎡ in Yangsan, Gyeongnam, was around 6.5 million KRW. Two months later, in January, the average price rose to 7.2 million KRW. The "Yangsan Mulgeum Daebang Nobland Phase 6 The Class" 84.993㎡ unit in Mulgeum-eup, Yangsan, was sold for 695 million KRW (32nd floor) on the 9th of last month, nearly 200 million KRW higher than the 500 million KRW (34th floor) price on January 29, 2020.

Asan, which had been neglected in the Chungcheong region market, has also entered an upward trajectory. For the first time this year, the average apartment price per 3.3㎡ exceeded 6 million KRW. The fact that the neighboring Cheonan city was designated as an adjusted target area has been a boon for Asan. The pre-sale right for the 84㎡ unit of "Tangjeong District Ziwell City Prugio" in Asan was traded at a peak of 685.6 million KRW in January this year, about twice the pre-sale price of approximately 350 million KRW.

◆Booming Subscription Market... Crowds Flocking to 'Jupjup' = Non-regulated areas allow relatively free resale and have less stringent subscription and loan qualification requirements, attracting crowds to the pre-sale market. Last month, the "Gangneung Xi Fine Venue" by GS Construction in Gangneung, Gangwon Province, attracted 7,260 applicants for 552 units in the first-priority subscription, resulting in an average competition rate of 13.15 to 1, the highest ever in Gangneung city.

The "Hoban Summit Grand Mark," which was sold in Asan city in December last year, saw 66,695 applicants for 1,414 units in the first-priority subscription, showing a competition rate of 47.16 to 1. This is also the highest number of applicants for a first-priority subscription in Asan city. Additionally, 275 units offered later through non-priority supply due to disqualified or uncontracted units attracted 135,940 applicants.

Kim Byung-gi, team leader at Real House, said, "Apartment prices in major provincial cities that escaped regulation are skyrocketing, fully enjoying the balloon effect," adding, "The provincial pre-sale market is also booming accordingly."

◆Attention on Non-Regulated Areas with Upcoming Pre-Sales = In line with the hot pre-sale trend in non-regulated areas, construction companies are moving quickly.

Daewoo Construction will sell "Gimhae Prugio High-End Phase 2" in March at Lot 1, Block 2, Andong 1 District Urban Development Zone, Gimhae city. It will consist of 7 buildings, up to 47 floors, with units ranging from 59 to 84㎡, totaling 1,380 households. Residents can use nearby infrastructure such as Gimhae University Station and Shinsegae Department Store Gimhae branch, and living conditions are expected to improve significantly through the ongoing Andong urban development project.

The consortium of Doosan Construction and Kolon Global plans to sell "Gimhae Yulha The Sky City" around March in the area of 699-1 Sinmun-dong, Gimhae city. It is a large complex consisting of 3,764 apartment units (64?163㎡) and 629 officetel units (exclusive area 23?59㎡).

POSCO Construction will sell "The Sharp Tangjeong Station Centro" in the Baebang-eup area of Asan in March. It will consist of 11 buildings, up to 28 floors, with units ranging from 76 to 106㎡, totaling 939 households. The complex's advantage is that it is adjacent to Asan Tangjeong District across the Gokgyocheon stream.

DL E&C will supply the second complex of Big Island, "e-Pyeonhansesang Geoje Euro Sky," on the 26th in the L2 block of the Geoje Gohyeon Port district unit plan area, a non-regulated area in Geoje, Gyeongnam. It will be built with 8 buildings from basement level 1 to 34 floors, with units ranging from 84 to 99㎡, totaling 1,113 households.

Doosan Construction's "Samcheok Central Doosan We've," introduced in the Jeongsang-dong area of Samcheok, Gangwon Province, is also notable. It consists of 6 buildings from basement level 4 to 36 floors, with 736 households designed with units ranging from 74 to 114㎡. A distinctive feature is the secured sea view.

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