Outsider 'Saja' Tops Sejong... Housing Prices Rebound After 23 Months

Inflow of Non-Local Buyers
Quick Sale Properties Depleted Due to Special Bogeumjari Loan Launch

Housing prices in Sejong City have turned to 'increase' after 23 months. Sejong City, where housing prices had been sharply declining by hundreds of millions of won, recently saw the highest influx of non-local investors over the past three months, and with the addition of actual resident demand following the launch of the Special Bogeumjari Loan, housing prices appear to have rebounded.

[Image source=Yonhap News]

According to the Korea Real Estate Board's 'April Nationwide Housing Price Trend Survey' on the 16th, the comprehensive housing price index (apartments, row houses, detached houses, etc.) in Sejong rose by 0.65% compared to the previous month. This contrasts with major regional markets such as Daegu, Daejeon, and Busan, which recorded declining sales prices during the same period. Sejong's housing prices have been on a downward trend for 22 months since turning negative in June 2021 (-0.07%). In particular, Sejong experienced the largest drop in apartment prices nationwide last year, falling by 17.12%. After a rapid price increase due to the administrative capital relocation issue and a large supply, much of the previous gains were given back during the period of rising interest rates.

The recent rise in Sejong's housing prices is largely due to the perception that prices have bottomed out and the depletion of urgent sales in major complexes. In Dodam-dong, Doremaeul 11 Complex, an 84㎡ unit recorded a total of 8 transactions last month. On the 21st, a unit on the 7th floor was brokered at 545 million won, but a week later on the 28th, a 5th-floor unit in the same complex changed hands for 650 million won. Since then, asking prices in this complex have ranged from the high 500 million won to the 800 million won level. During the first quarter of this year, there were a total of 7 sales in this complex, and the volume of transactions in April alone exceeded that of the previous three months combined.

High-priced transactions over 1 billion won have also been observed after a lull. In Saetteum Village 9 Complex, a 121㎡ unit was sold for 1.2 billion won in February, and this month, 101㎡ and 108㎡ units in the same complex were sold for 1 billion won and 1.09 billion won respectively. In Naritjae Village 1 Complex in Naseong-dong, a 112㎡ unit in a commercial facility-dense area changed hands for 1.3 billion won last month.

The upward trend in Sejong's housing prices was partly driven by demand from non-local investors. According to Asil, Sejong City ranked first in the increase of non-local purchases over the past three months, with 3,523 of the total 1,564 transactions being by non-local investors. This means that one out of every three buyers was a non-local investor. In the second half of last year, monthly non-local transactions averaged only about 70 cases.

Additionally, the government's launch of the 'Special Bogeumjari Loan' in January appears to have stimulated the buying sentiment of actual users. In fact, apartment transaction volume in Sejong, which remained around 600 cases in the fourth quarter of last year, surged to about 1,200 cases in the first quarter of this year, doubling.

However, there are also forecasts that the pace of price increases will slow down once the low- to mid-priced urgent sales are almost exhausted due to the effect of the Special Bogeumjari Loan. Although some regions are showing rising housing prices as high interest rates pause and real estate regulations ease, concerns about an economic downturn remain, making it difficult to consider this a broad upward trend. Ultimately, it is expected that the polarization phenomenon, where demand concentrates based on location and price competitiveness, will intensify.

Park Won-gap, Senior Real Estate Specialist at KB Kookmin Bank, said, "Although some areas are showing an upward trend, the polarization phenomenon where demand concentrates based on location and price competitiveness will become more severe," adding, "Due to the significant aftereffects of gap investment, combined with reverse lease difficulties and high interest rates, actual transactions are expected to occur mainly in large complexes."

On the other hand, Yoon Ji-hae, Senior Researcher at Real Estate R114, said, "After a rapid rise until 2020, the market has been proactively adjusting since 2021. The price surge due to positive factors such as the National Assembly relocation has now fallen first, and the adjustment phase appears to be concluding," adding, "Since there are no unsold units in the area, it is expected that the upward trend will continue as urgent sales are absorbed."

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