Sejong City House Prices Drop from 1 Billion KRW to 650 Million KRW... Harder Summer Than Last Year

House Prices Drop 200 to 300 Million KRW, Growing Concerns Over Hard Landing
"During Interest Rate Hikes, Only Hope Is Administrative Capital Relocation"

A panoramic view of the apartment complex area as seen from Sejong City Hall. [Image source=Yonhap News]

[Asia Economy Reporter Noh Kyung-jo] The housing prices in Sejong City, which had been buzzing with the 'completion theory of the administrative capital,' are now raising concerns about a hard landing. Actual transaction prices in Saerom-dong, considered the prime neighborhood in Sejong City, as well as in Eojin-dong and Dodam-dong, are 200 million to 300 million KRW lower than a year ago. While some view this as a natural adjustment, the prevailing opinion is that the downward trend will continue for the time being due to psychological contraction amid the interest rate hike period.

According to the Ministry of Land, Infrastructure and Transport's actual transaction price disclosure system on the 24th, an 84㎡ unit (4th floor) in The Sharp Central City in Eojin-dong was traded for 653 million KRW earlier this month. Compared to the same size and floor unit that was traded for 990 million KRW at the end of July last year, this represents a drop of about 340 million KRW in roughly one year.

In Dodam-dong, a 59㎡ unit in Jungheung Green County (Complex 13) was traded in the 300 million KRW range for the first time this year. This complex had been trading at 520 million KRW in February and 495 million KRW in June. The 84㎡ unit in Doream Village Complex 11 (Bando Yubora) also recently sold for 500 million KRW, about 300 million KRW less than the 795 million KRW price in February.

The situation is no different in Saerom-dong, known as the 'Gangnam of Sejong City.' An 84㎡ unit in Saetteum Village Complex 1, which was traded around 750 million KRW earlier this year, was sold for 620 million KRW on the 1st. The decline is even more significant compared to a year ago. Last summer, these units typically sold for between 820 million and 840 million KRW. A 74㎡ unit in Saetteum Village Complex 3 was recently traded for 599 million KRW, more than 200 million KRW lower than the 810 million KRW price in July last year.

Two years ago, Sejong City alone enjoyed a soaring apartment price increase rate of 44.9% annually nationwide. Low interest rates and rumors of the presidential office and National Assembly moving acted as positive factors. However, the favorable conditions did not last long. As the administrative capital relocation stalled and external factors such as interest rate hikes added up, housing prices have continued to decline.

However, with the government recently pushing forward again on the administrative capital relocation, some expect a rebound, if not immediately. On the 16th, Kim Young-bae, a member of the Democratic Party of Korea, introduced a partial amendment bill to the 'Special Act for the Construction of the Administrative City in Yeongi and Gongju Areas for Follow-up Measures of the New Administrative Capital.' This bill aims to relocate the Ministry of Justice and the Ministry of Gender Equality and Family to Sejong.

A representative from a real estate agency in Saerom-dong said, "Considering that Sejong is a regulated area and that rising raw material costs have made new developments difficult, if the administrative capital relocation is promoted, existing apartments will inevitably gain momentum," adding, "We receive quite a few calls asking whether it is a good time to invest now."

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