Newly Designated Residential Sites 2 Days Ago Had 'Speculation Seeds' Planted 3 Years Ago

Rapid Increase in Land Transactions Since 2018 in Uiwang and Ansan
Local Residents "Outsiders Flock After Information Leak from National Assembly"
Speculation Controversies Recur with New Towns and Large-scale Land Development
Experts "Redevelopment and Reconstruction in Seoul and Existing Cities Are Better"

On the 30th of last month, it was revealed that land transactions have surged and prices have significantly increased over the past 3 to 4 years in the Uiwang, Gunpo, and Ansan areas, which the government has decided to develop as new town-level residential districts. This has sparked criticism regarding the large-scale residential land development. In the agricultural fields around Chopyeong-dong, Uiwang-si, Gyeonggi Province, saplings are densely planted.

"This place was quite a hot topic a few years ago. In 2018, there was information circulating that it would be developed. Since then, there have been rumors that development would happen this year, next year, or within five years. When outsiders started coming in, the land ownership changed a lot." (Representative of Real Estate Agency A in Uiwang Chopyeong-dong)

Among the Uiwang-Gunpo-Ansan (Ui-Gun-An) district, which is the largest among the third phase of new public housing sites with an area of 5.86 million square meters, a common statement from the real estate industry is that "land transactions by outsiders have sharply increased in recent years."

They commonly pointed to '2018' as a turning point for land transactions.

That year, former Democratic Party lawmaker Shin Chang-hyun (currently President of the Metropolitan Landfill Management Corporation) caused controversy by releasing a press statement in September disclosing eight new housing site candidates in Gyeonggi including Gwacheon, Ansan, Gwangmyeong, Uijeongbu, Siheung, Uiwang, and Seongnam ahead of the government's official announcement.

Shin resigned from the National Assembly Land, Infrastructure and Transport Committee due to allegations of leaking development information in advance. Although the area was not designated as a housing site at that time, land transactions increased rapidly afterward.

Eventually, the area was belatedly confirmed as a housing site about three years later, making the outsiders who bought land at low prices the biggest beneficiaries of land compensation.

◇Speculation Repeats with Every Large-scale Housing Development= Every time the government announces large-scale housing developments such as new towns, speculation controversies recur. Earlier this year, the Gwangmyeong-Siheung district among the 3rd phase new towns was a representative case. It was revealed that 13 employees of the Korea Land Corporation purchased land within the district 1 to 3 years before the new town announcement. In 2001, it was also confirmed that two employees of the Korea Land Corporation purchased land worth 7.2 billion KRW in the Yongin Jukjeon district.

Experts point out that repeated allegations of pre-government leaks and speculation controversies are structural problems of the current national land development plan. For large-scale new towns and housing developments, the project sites inevitably have to be reviewed in areas with low land prices such as green belts or agricultural zones.

At the same time, when looking for areas with good accessibility to Seoul, the regions available for development around the metropolitan area are practically limited. Therefore, the areas repeatedly mentioned whenever the government reviews new housing site candidates are largely the same. This means that even without prior development information, speculative forces can predict the likely development sites to some extent.

◇Prior Information? "You can tell just by looking at the land"= The frontline real estate industry generally believes that development information for housing sites around the metropolitan area is almost fully disclosed. Once a place is considered as a candidate site, development is a foregone conclusion; only the timing is uncertain. For example, the Gwangmyeong-Siheung district was once designated as a public housing site during the Lee Myung-bak administration but was later canceled. Despite concerns about prior speculation, there was no alternative, so it was eventually designated as a housing site.

An industry insider pointed out, "Speculation on metropolitan area land is not an issue of information but how long one can tie up surplus funds."

Professor Jo Joo-hyun of Konkuk University's Department of Real Estate said, "Problems inevitably arise because the insufficient supply is insisted to be met only through new housing sites within the metropolitan area." He added, "Instead of establishing proper plans, the government designates available land here and there, which causes speculative demand to flock to any place with even a slight possibility of development."

There are also criticisms that government-led large-scale housing developments effectively create 'waiting demand for speculation.' Song Seung-hyun, CEO of Urban and Economy, said, "Excessive promotion and signaling of supplying new towns and housing sites from the past have attracted speculative demand and funds."

◇Alternatives to New Towns: Redevelopment and Reconstruction of Existing Cities= Questions are raised about whether new towns and large-scale housing developments are sustainable policies as means of housing supply. Experts argue there is no reason to spend huge amounts of money building infrastructure on the outskirts of cities. It is better to redevelop aging cities. In some areas, there are even concerns that the distance from Seoul will lead to rejection by demanders.

Ko Jun-seok, adjunct professor at Dongguk University Law School, said, "The side effects of large-scale housing developments can be minimized through private redevelopment projects." He added, "For example, instead of building the Gwangju Taejeon new town next to Bundang, it is better to increase supply through reconstruction in Bundang."

He explained, "Bundang already has existing infrastructure, whereas Taejeon requires new infrastructure development and incurs higher social costs." Increasing supply through redevelopment projects in existing 1st, 2nd, and 3rd phase new towns as well as Seoul reconstruction projects is more effective.

Professor Ko said, "It is also inappropriate to keep developing areas around Seoul when demand is concentrated in Seoul itself," adding, "It is time to consider comprehensive national land management."

Professor Jo also said, "If policies to ease redevelopment and reconstruction within cities are pursued, sufficient supply will be possible," and "It will also minimize speculative demand like now."

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