Apartment Buying Sprees in Gangwon-do... Investment Demand Concentrated in Non-Regulated Areas

Apartment prices in the Gangwon-do region are fluctuating significantly. As it is a non-regulated area with many apartments priced under 100 million KRW, it is interpreted that investment demand has surged to avoid tax surcharges and loan regulations.

According to the Korea Real Estate Board on the 9th, the average apartment sale price in Gangwon-do in September was 179.54 million KRW, up 21.15% compared to the beginning of the year. This figure greatly surpasses the record-high growth rate of 12.5% in 2017, which was driven by the Pyeongchang Winter Olympics boom.

By region, Chuncheon-si had the highest average apartment sale price at 228.952 million KRW. The year-to-date growth rate was also the highest at 26.25%. In particular, Sokcho-si, which entered the 200 million KRW range in August, maintained a steep upward trend in September with an average sale price of 204.24 million KRW, firmly securing its position as the second highest in Gangwon-do for the first time in history since August. Wonju-si (201.87 million KRW) surpassed the 200 million KRW average sale price for the first time ever, and Gangneung-si recorded 197.901 million KRW, approaching the 200 million KRW mark.

Transaction volume is also at an all-time high. From January to September, apartment sales transactions in the Gangwon region totaled 23,694, an increase of 5,405 compared to the same period last year. This is the highest transaction volume for the same period since statistics began in 2006.

Experts analyze that as the entire Seoul metropolitan area has effectively become a regulated zone, investment demand is rapidly concentrating in Gangwon-do, a 'regulation-free zone.' In fact, purchases of Gangwon-do real estate by outsiders are at the highest level nationwide. Over the past six months, the volume of transactions by outsiders in Wonju-si reached 2,871, ranking first in the country. Especially strong is the demand for apartments priced under 100 million KRW. Currently, if multi-homeowners or corporations purchase apartments under 100 million KRW, a basic acquisition tax rate of 1.1% (including rural special tax and local education tax) applies regardless of the number of houses owned. Also, as it is a non-regulated area, capital gains tax surcharges can be avoided.

At Sekyung 3rd Apartment in Dan-gye-dong, Wonju-si, Gangwon (with the highest official price of 51.9 million KRW), 294 transactions have taken place this year. With a total of 420 households, more than half of the owners have changed within just nine months.

The pre-sale market is also enjoying an unprecedented boom. On the 13th of last month, the first priority subscription for 367 households at ‘Gyodong Haneulchae Sky Park’ in Gangneung-si attracted a total of 24,925 applicants, achieving an average competition rate of 68 to 1, breaking the previous Gangneung Lotte Castle Signature record in the province (46.8 to 1) set just two months earlier.

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