‘New Town Halo Effect’ Drives Shiheung Record Highs... 200 Million Won Jump in One Month

Siheung Apartment Price Increase Rate in March 3.64%... 'Nationwide No.1'
Expectations for Infrastructure Development Including Transportation Measures
Incheon Apartment Sale Price Increase Rate 0.49%... 4 Weeks of Continuous High Growth
"Can't Buy a Home in Seoul"... Demand Rises for Mid-Low Priced Properties

Siheung Central Prugio Rendering (Photo by Daewoo E&C)

[Asia Economy Reporter Ryu Tae-min] "Since Gwangmyeong and Siheung districts were designated as new towns, inquiries from buyers have been nonstop. Although there was a pause when talks about canceling the 3rd phase new towns surfaced, demand surged again after the government announced it would proceed." (A representative from Siheung Eunhaeng-dong A Real Estate Agency)

About a month after the government announced the Gwangmyeong and Siheung new towns, the housing market fever in Siheung shows no signs of cooling. Thanks to the 'halo effect' of the new town announcement, demand has poured in, and apartment prices in Siheung rose the most nationwide last month.

On the 18th, Asia Economy analyzed weekly apartment price trend data from the Korea Real Estate Board and found that from March 1 to 29, about a month after the new town announcement, apartment sale prices in Siheung rose by 3.64%, ranking first nationwide in terms of growth rate. Gyeonggi's Uiwang followed with 3.55%, and Ansan with 3.42%.

Apartment transactions also surged. According to the Gyeonggi Real Estate Portal, there were 1,172 transactions in February, a 30.6% increase compared to January's 897 transactions. As of this date, March transactions have already exceeded 1,000 with 1,043 cases. Considering the reporting deadline is up to about two weeks, the number of transactions in March is expected to surpass February.

84㎡ Units Rise About 200 Million KRW in a Month or Two... Asking Prices Soar to 1.4 Billion KRW

Several complexes have seen prices jump by about 200 million KRW within a month or two. According to the Ministry of Land, Infrastructure and Transport's real transaction disclosure system, the 84㎡ (exclusive area) unit in 'Siheung Central Prugio' in Daeya-dong, Siheung, was traded at 863 million KRW on the 5th of last month, setting a new record. This price is about 200 million KRW higher than the transaction price of 670 million KRW on February 4, when the 2.4 measures were announced. Currently, asking prices for this size range from 900 million to 1.4 billion KRW.

The 115㎡ unit in 'Siheung Eun-gye Woomy Lin The First' located in Eunhaeng-dong was traded at 1.01 billion KRW on the 11th of last month. Considering it was traded at 850 million KRW on February 9, it rose by more than 150 million KRW in a month. A representative from nearby A Real Estate said, "With the new town being built nearby, expectations for improved residential environments in this area have increased, boosting housing demand."

This sharp rise is due to expectations from the 3rd phase new town designation, including transportation measures such as the Shinansan Line and Daegok-Sosa Line, as well as various infrastructure developments. Professor Seo Jin-hyung of Gyeongin Women's University (President of the Korea Real Estate Society) explained, "With the new towns in Gwangmyeong and Siheung, there are many forecasts that various infrastructures will be established in the nearby Siheung area, increasing demand."

The influx of younger buyers also seems to have influenced the market. Park Won-gap, Senior Specialist at KB Real Estate, said, "Siheung has many mid-to-low priced apartments suitable for young buyers, so recent 'home ownership' demand has concentrated here."

While Seoul and Gyeonggi Catch Their Breath... Incheon Housing Prices on the Rise

Siheung is not the only area in Gyeonggi showing an upward trend. Incheon, which was relatively neglected amid last year's real estate frenzy in Seoul and other major metropolitan areas, has recently shown an upward trend. This seems to be because buyers burdened by skyrocketing prices are flocking to Incheon, where prices are relatively affordable.

According to the Korea Real Estate Board, Incheon's weekly apartment sale price increase rate was 0.49% in the first week of April (as of the 5th), marking the highest in about a year since March 16 last year (0.53%). Incheon's apartment prices have risen for four consecutive weeks, starting at 0.36% on March 15, then 0.46% (March 22), 0.48% (March 29), and 0.49% (April 5), with the rate of increase growing.

Meanwhile, apartment prices in Seoul and Gyeonggi appear to be slowing. Due to the concretization of the 2.4 measures, buying momentum has weakened and a wait-and-see attitude continues, with Seoul (0.06% → 0.05%) and Gyeonggi (0.36% → 0.34%) showing a slowdown in growth during the same period.

Private statistics also highlight Incheon's apartment price rise compared to Seoul and Gyeonggi. According to KB Live On, Incheon's apartment price increase rate has continued rising since January 4, when it was 0.22%, reaching as high as 0.82% on March 22. During the same period, Seoul's price increase rate was only 0.3%.

In Songdo International City, Yeonsu-gu, Incheon, which led the rise with a 3.27% increase in a month, mid-sized apartments priced over 1 billion KRW are appearing one after another. According to the Ministry of Land, Infrastructure and Transport's real transaction disclosure system, the 84㎡ unit of 'Songdo Central Park Prugio' was traded at 1.135 billion KRW on January 11, marking the highest price for that size in Songdo. Nearby 'Songdo The Sharp First Park' and 'Songdo The Sharp Master View' 84㎡ units were traded at 1.05 billion KRW each last month, breaking the '1 billion KRW ceiling.' So far this year, there have been a total of 12 mid-sized transactions exceeding 1 billion KRW in Songdo.

Auction Fever Heats Up... Sold Above Appraised Value

As apartment prices continue to rise, buyers are flocking to court auctions where properties can be purchased below market price. According to the 'March Auction Trend Report' by Gigi Auction, a court auction specialist company, the winning bid rate for Incheon apartments was 103.8%, marking the highest in about a year since April last year (103.9%). The winning bid rate is the ratio of the winning bid price to the appraised value; for example, an apartment appraised at 100 million KRW was sold at 103.8 million KRW.

This sharp rise is due to 'home ownership' demand concentrating in Incheon. Last year, as Seoul apartment prices soared and the jeonse (long-term deposit lease) crisis continued, real buyers seemed to turn their eyes to Incheon, where prices are relatively affordable. In fact, among 4,926 apartment transactions in Incheon in February, 1,788 (36.3%) were purchased by outsiders.

Repeated transportation benefits in Incheon also seem to have influenced the market. Incheon is part of the GTX (Greater Seoul Metropolitan Express Railway) B and D lines, which will improve transportation conditions in the long term. GTX-B runs from Songdo, Incheon, through Yeouido, Seoul Station, Cheongnyangni, and extends to Maseok, Namyangju. GTX-D is not yet finalized, but both routes proposed by Gyeonggi Province (Geomdan to Hanam) and Incheon (Incheon Airport to Bucheon) include Incheon.

Ham Young-jin, Head of the Big Data Lab at Zigbang, explained, "Incheon has many relatively affordable mid-to-low priced apartments compared to Seoul, so demand has recently concentrated here," adding, "Expectations for improvements in transportation environments such as GTX, Line 7 extension, the 2nd Gyeongin Line, and Wolpan Line have increased."

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