Expectations for Multi-Housing Regulation Easing Bring Positive Trends to Non-Regulated Local Areas

Average Sale Price Growth Rates in Chungbuk and Gangwon Surpass Capital Area... Increase in Subscription Closing Rates Too

[Asia Economy Reporter Kangwook Cho] As the new government is expected to significantly ease regulations related to multi-homeowners, apartments in non-regulated provincial areas are receiving great attention. This is because, with the reduction in tax burdens, there is no longer a need to insist on owning just ‘one home.’

According to industry sources on the 31st, the apartment price growth rate in small and medium-sized provincial cities has already far surpassed that of the metropolitan area, and signs of subscription success are also becoming prominent.

According to KB Real Estate, as of February, the average sales price increase rate per 3.3㎡ (1 pyeong) for apartments in other provincial areas excluding the five metropolitan cities was 5.22% compared to December last year. This significantly exceeds the 3.16% increase rate in the five metropolitan cities, 2.81% in Seoul, and 2.90% in the metropolitan area. Looking at the increase rates by region within other provincial areas, ▲Chungbuk 6.92% ▲Gangwon 6.27% ▲Chungnam 5.46% ▲Gyeongnam 5.35% ▲Sejong 5.28% ▲Jeonbuk 5.23% ▲Gyeongbuk 4.76% ▲Jeonnam 3.46%, showing strong performance in the Chungcheong and Gangwon regions.

In fact, examining transactions during this period on the Ministry of Land, Infrastructure and Transport’s Real Transaction Price Disclosure System, the Gangneung Gyodong Poonglim I-Won Apartment with an exclusive area of 84.9964㎡ was sold for 395 million KRW (14th floor) on December 24 last year and for 435 million KRW (17th floor) on February 18, rising by 40 million KRW. Also, the Gangneung Gyodong Lotte Castle 1 Complex with an exclusive area of 135㎡ was traded for 580 million KRW (3rd floor) on the 14th, which is 131 million KRW higher than the 449 million KRW (3rd floor) price on July 14 last year. It rose about 30% in just eight months.

Demand for non-regulated areas is also rapidly increasing. According to the Korea Real Estate Board’s Subscription Home, the first-priority subscription closing rate in small and medium-sized provincial cities from January to February this year was about 54.8%. This is about 18 percentage points higher than the same period last year (36.3%). On the other hand, the first-priority closing rate for apartments supplied in the metropolitan area during the same period was 58%, down 17 percentage points from last year (75%). It is interpreted that most small and medium-sized provincial cities, which are non-regulated areas, are gaining a spillover benefit as most of Seoul and the metropolitan area are regulated.

In non-regulated areas, after joining the subscription savings account for more than six months (two years or more in regulated areas) and being over 19 years old, not only the head of the household but also household members qualify for first-priority subscription, and homeowners can also apply for first-priority subscription. There are no restrictions on re-winning.

An industry official said, "As expectations grow that the new government will ease regulations related to multi-homeowners, including capital gains tax surcharges, progressive acquisition tax rates, and mortgage loan standards and ratios, it will further stimulate buying sentiment."

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