'GTX·Reconstruction' Success or Failure... Diverging Fortunes of Seoul Metropolitan Area Housing Prices

Seoul Mayor Oh Se-hoon's Beneficiary Area Nowon Housing Prices Soar
Up 0.16% This Week... Twice Seoul Average

Gimpo with Reduced GTX 'Frowns'... Daily Protests
Apartment Price Increase Rate Shrinks to 0.02%

Meanwhile, Siheung 'Booms' Due to Various Transportation Benefits
GTX for Housing Price Stability, Instead Backfires

[Asia Economy Reporter Moon Jiwon] The real estate market in the Seoul metropolitan area is experiencing mixed fortunes due to factors such as the metropolitan transportation network and regulations related to reconstruction. Gimpo, which was hit hard by the downsizing of the Seoul Metropolitan Express Railway (GTX) Line D and has seen housing prices begin to stagnate, and Nowon-gu in Seoul, which is benefiting from reconstruction expectations despite being excluded from the land transaction permission zone, are representative examples. There are concerns that regulations like GTX and land transaction permission zones, intended to alleviate housing burdens for low-income residents, are instead making the metropolitan real estate market more unstable.

'Reconstruction' Nowon, 'New Guro Line' Siheung Stirred

According to the Korea Real Estate Board on the 30th, apartment prices in Nowon-gu, Seoul, rose by 0.16% this week. Although the increase was slightly less than last week's 0.17%, it is still double the average increase rate of 0.08% in Seoul. It is the highest increase rate among the 25 autonomous districts in Seoul. Nowon-gu is one of the biggest beneficiaries of Mayor Oh Se-hoon's policy to ease reconstruction regulations. During the election campaign, Mayor Oh directly mentioned areas such as Sanggye-dong in Nowon-gu and Mok-dong in Yangcheon-gu, expressing his commitment to promoting reconstruction in these areas.

Since Mayor Oh took office, the apartment price increase rate in Nowon-gu soared from 0.09% to 0.17% within a week. This is interpreted as a result of growing expectations for reconstruction and the perception that prices are relatively affordable compared to other parts of Seoul, attracting strong buying demand. As Seoul City designated reconstruction complexes in other areas such as Apgujeong-dong in Gangnam-gu and Mok-dong in Yangcheon-gu as land transaction permission zones, Nowon-gu was excluded, creating a balloon effect. A representative from a real estate agency in Sanggye-dong said, "Inquiries about purchasing reconstruction complexes have increased further since the beginning of this month."

In Sanggye-dong, Nowon-gu, the 84.41㎡ unit in Jugong Complex 1 recorded a transaction price of 850 million KRW on the 26th, setting a new record. Compared to the transaction price of 590 million KRW in March last year, the price has risen by 260 million KRW in just over a year.

Siheung City in Gyeonggi Province, where the new Guro Line connecting Daeya in Siheung to Mok-dong is scheduled to be established, is in a highly excited mood. This week, apartment prices rose by 1.02%, which is three times the Gyeonggi Province average of 0.31%, and the increase is steeper compared to other major metropolitan areas.

On the afternoon of the 29th, in front of a building in Yongsan-gu, Seoul, where the 2nd Metropolitan Area Wide-Area Transportation Basic Plan and the 4th Metropolitan Area Wide-Area Transportation Implementation Plan public hearing was held, members of the Gimpo Geomdan Transportation Citizens' Coalition are protesting, urging the change of the planned 'GTX-D' line connecting Gimpo and Bucheon to a direct connection to Seoul and the connection of Seoul Subway Line 5 to Gimpo.
[Image source=Yonhap News]

Gimpo Frowns Over Half-Baked GTX

On the other hand, Gimpo in Gyeonggi Province is 'frowning' due to the downsizing of the GTX-D line. The plan to connect only from Gimpo Janggi Station to Bucheon Sports Complex Station without linking to Gangnam was confirmed in the metropolitan area transportation basic plan and implementation plan the day before, sparking local opposition. A man in his 40s living in Gimpo Hangang New Town said, "Among Seoul-adjacent cities with a population nearing 500,000, Gimpo is the only one without a direct railway connection to Seoul," adding, "I cannot contain my anger over this decision."

Looking at the statistics from the Korea Real Estate Board, the apartment price increase rate in Gimpo dropped to 0.02% this week. Considering that before the metropolitan transportation plan announcement in February, the increase rate was between 0.19% and 0.24%, the atmosphere has completely reversed. Although there is no clear trend of a sharp price drop yet, the industry warns that housing prices may be adjusted in the short term as investors, rather than actual residents, begin to sell off.

Given the significant impact of transportation and reconstruction developments on local housing prices, there are calls for more delicate government coordination. The original purpose of GTX was to alleviate transportation inconveniences in the metropolitan area and stabilize housing prices in Seoul and nearby areas, but recently, the saying "housing prices rise along the GTX lines" has emerged, making it a major cause of market instability. The land transaction permission zones, recently interpreted as a 'green light' for reconstruction, are instead stimulating housing prices. Many analyses suggest that areas designated as land transaction permission zones last year, such as Samseong, Daechi, and Cheongdam-dong, did not see significant housing price stabilization effects.

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