Incheon 11.8%, Jeju 10.4%... Chaotic Local Real Estate Market

Record High Increase Rate in the Capital Area... Market Overheating
Rising Prices Also in Provinces like Jeju, Gangwon, Busan
House Price Stability Still Far Despite Government Regulation Expansion
However, Sejong and Changwon Slow Down... Daegu Unsold Units Increase

[Asia Economy Reporter Moon Jiwon] While the apartment price increase rate in the Seoul metropolitan area has reached an all-time high, housing prices in local areas such as Jeju Island, Gangwon Province, and Busan are also rising rapidly. Jeju Island, where housing prices fell last year, has already risen by more than 10% in the first half of this year. Not only major metropolitan cities like Busan and Daegu but also Gangwon and Chungcheong regions are showing a steeper upward trend compared to previous years. This is interpreted as the demand for 'owning a home,' which started growing around Seoul, spreading nationwide.

The Recurring Balloon Effect... Incheon and Jeju Jump Over 10% in 6 Months

According to the Korea Real Estate Board's 'Weekly Apartment Price Trends' on the 2nd, among metropolitan cities and provinces nationwide, the places where apartment prices rose the most in the first half of this year were Incheon (11.84%), Gyeonggi Province (10.33%), Jeju Island (10.42%), and Daejeon (8.60%), in that order. Incheon rose by 0.57% just this week, recording the highest increase rate in 9 years and 1 month. It is effectively the core of the nationwide real estate market in the first half of the year. Geomdan New Town, once called the 'graveyard of unsold units,' saw its pre-sale premium rise to around 300 million to 400 million KRW. Expectations that transportation will greatly improve with the opening of the Seoul Metropolitan Area Express Railway (GTX) B and D lines acted as a positive factor.

Housing prices in major local areas are also soaring. Jeju Island, which rose 10.42% in the first half of this year, is a representative example. The economy revived as tourists flocked due to COVID-19, and the 'balloon effect' concentrated due to its status as a non-regulated area, causing prices to skyrocket. A 101.99㎡ (exclusive area) unit at Araswitchen in Ara-il-dong, Jeju City, was traded for 870 million KRW on the 26th of last month, increasing by 90 million KRW in about two months. Jeju's sales supply-demand index is 130.8, recording the highest level nationwide.

Busan also rose 7.58% this year as buying demand increased. Compared to the 0.13% increase during the same period last year, the rise is significant. Investment is pouring not only into popular areas like Haeundae District but also into mid- to low-priced complexes. A Korea Real Estate Board official explained, "In areas like Saha District, transactions are actively occurring in complexes with official prices below 100 million KRW, causing apartment prices to rise."

Gangwon Province, a non-regulated area, is also attracting attention with a 4.70% increase this year. A 131㎡ unit at The Ocean Xi in Sokcho City, Gangwon, which was sold last year, was traded for 1.69008 billion KRW in May.

Some Local Areas See Price Drops and Increasing Unsold Units

However, abnormal signs such as falling housing prices and accumulating unsold units are also detected in some regions.

Changwon City's Seongsan District and Uichang District, which were designated as regulated areas due to a significant rise in housing prices last year caused by speculative demand from outsiders, have recently seen a resurgence in price increases, but overall buying demand has decreased, and housing prices have fallen by more than 1% compared to the same period last year.

As of May, Daegu recorded 1,185 unsold housing units, a 32% increase compared to 897 units in the previous month. A representative from the sales industry predicted, "Since there are many planned supply units in Daegu, the unsold housing problem may worsen." The industry cautiously speculates that the increase in unsold units starting in Daegu could spread to other regions later.

Sejong, which rose 16.07% in the first half of last year, has seen housing prices fall for seven consecutive weeks except for one period of stabilization. According to the apartment real transaction application 'Asil,' the number of listings in Sejong increased by 2.7%, from 3,817 to 3,922, in the past month, showing the highest growth rate nationwide. A Korea Real Estate Board official explained, "In Sejong, buying demand is decreasing, and listings are accumulating," adding, "Jeonse (long-term deposit lease) prices are also continuing to decline."

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