83 Consecutive Weeks of 'Solo Strength'... What Is Happening in Icheon?

Apartment Prices Rise 5.66% This Year
Contrasting with Declining Housing Prices in the Seoul Metropolitan Area
6 out of 10 Buyers Are Non-Residents

Apartment exterior / Photo by Jinhyung Kang aymsdream@

[Asia Economy Reporter Ryu Tae-min] While apartment prices continue to decline in most areas of the Seoul metropolitan area, the sales market in Icheon-si, Gyeonggi-do, is showing signs of further expansion. This is interpreted as a result of concentrated investment demand from non-local buyers, as it remains one of the few non-regulated areas and many complexes have official prices below 100 million KRW.

According to the Korea Real Estate Board on the 23rd, apartment prices in Icheon-si rose by 5.66% compared to the end of last year. This is the highest increase among all cities, counties, and districts nationwide. In contrast, apartment prices in major Seoul metropolitan areas such as Seoul (-0.13%), Incheon (-0.34%), Gwacheon (-0.93%), Hwaseong (-2.38%), and Siheung (-2.46%) declined during the same period.

Apartment prices in Icheon have been on an upward trend for 83 consecutive weeks since November 2020, recording a high increase of 21.29% during this period. In the second week of June, prices rose by 0.30%, continuing the upward trend and approaching the highest weekly increase of 0.32% recorded in the first week of January this year.

This trend is also reflected in actual transaction prices. A 134.98㎡ (exclusive area) unit in Dongyang Paragon, Songjeong-dong, set a new record on the 10th of last month at 570 million KRW, rising 170 million KRW from the previous highest price of 400 million KRW recorded in April last year. An 84.99㎡ unit in Hillstate, Galsan-dong, was sold for 505 million KRW on the 29th of last month, increasing by 125 million KRW compared to the highest price of 380 million KRW in the same period last year.

‘Non-Regulated Premium’ and Homes Below 100 Million KRW Official Price... Influx of Non-Local Investment

This appears to be largely driven by the ‘non-regulated area premium’ in the Seoul metropolitan area, attracting significant investment from non-local buyers. According to the Korea Real Estate Board, among 5,556 apartment transactions in Icheon over the past year and a half since November 2020, 3,415 cases (61.5%) were purchased by buyers residing outside Icheon. This means that 6 out of 10 buyers are non-local. Non-regulated areas are exempt from restrictions such as loan limits and resale restrictions.

The concentration of investment demand in complexes with official prices below 100 million KRW is also cited as a major factor. As the government raised acquisition tax rates up to 12% for multi-homeowners, homes with official prices below 100 million KRW were given exceptions, leading many small-scale non-local investors seeking to avoid government regulations to flock to these properties, intensifying transactions. When a corporation with an office located outside the Seoul metropolitan area (which includes all of Seoul and parts of Incheon and Gyeonggi) purchases a home with an official price below 100 million KRW, the acquisition tax rate is reduced to 1.1%.

In fact, a 59.4㎡ unit in Hyundai I-Park, Sadong-ri, Daewol-myeon, changed hands for 220 million KRW on the 18th, rising more than 100 million KRW from the record price of 118 million KRW reported in June last year. A 59.71㎡ unit in Anheung Jugong, Anheung-dong, was traded for 280 million KRW on the 11th, increasing by 95 million KRW compared to the record price of 185 million KRW in June last year.

The fact that Bubal-eup in Icheon is the northern terminus of the Jungbu Inland Railway, which extends to Chungju, is also seen as a positive factor. Opened in December last year, this railway allows transfers at Bubal Station to the Gyeonggang Line, enabling travel to Seoul’s Gangnam area via Pangyo. Additionally, transfers at Chungju Station to the Chungbuk Line have greatly improved transportation convenience.

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