House prices in Mungyeong and Yeongju, Gyeongbuk, are on the rise. The pace of increase has surpassed that of “Mayongseong” (Mapo, Yongsan, Seongdong), the most popular residential areas in Seoul. This contrasts with the stagnation seen in other regional real estate markets. Analysts attribute the concentrated demand to the “KTX belt” effect resulting from improved rail transportation, especially in a situation where no new housing is being supplied.

According to Korea Real Estate Board data released on June 12, the cumulative apartment sales price increase rate in Mungyeong this year stands at 4.18%, ranking 5th among all cities, counties, and districts nationwide, and the highest among provincial areas. In terms of growth rate, it follows Gwacheon in Gyeonggi (6.21%), Songpa in Seoul (6.14%), Gangnam (5.61%), and Seocho (5.17%). During the same period, Mapo district posted 2.95%, Yongsan district 2.86%, and Seongdong district 3.42%, all lower than Mungyeong. Neighboring Yeongju also recorded 2.63%, ranking 11th nationwide, highlighting the upward trend along the “Mungyeong-Yeongju” axis. In contrast, the nationwide average during the same period was -0.34%, indicating a decline.

House prices in Mungyeong and Yeongju cities, Gyeongbuk, are rising.

The cumulative apartment sales price increase rate in Mungyeong city this year is 4.18%, ranking 5th among cities, counties, and districts nationwide, and the highest in the provinces.

During the same period, Mapo district recorded 2.95%, Yongsan district 2.86%, and Seongdong district 3.42%, all lower than Mungyeong.

In a situation where new housing is not supplied, demand has concentrated as the area gains attention as a 'KTX belt' due to improvements in railway transportation.Photo by Getty Images Bank

The increase in Mungyeong’s apartment prices over the first five months of this year has already far surpassed last year’s annual growth of 3.79%. Housing prices have surged as transportation infrastructure has improved. In November last year, the Jungbu Naeryuk Line was extended to Mungyeong, dramatically improving access to the Seoul metropolitan area. Travel time to Pangyo, Gyeonggi, is now around 1 hour and 30 minutes. This is more than an hour faster than by intercity bus. The KTX-Ieum currently operates eight round trips per day.

In response, Mungyeong began construction of a station-area mixed-use development project this March. The city aims to attract more residents and expand housing demand by creating an urban space that combines commercial, public, business, tourism, and industrial functions. In neighboring Yeongju, the completion of the double-tracking of the Jungang Line in December last year enabled direct KTX service between Cheongnyangni, Yeongju, and Busan, further improving transportation infrastructure.

Hwang Jae-du, head of the Mungyeong chapter of the Korea Association of Realtors, said, “Since the beginning of this year, not only outside investors but also local upgraders have increased significantly. A customer from Daegu was surprised and asked, ‘Has the price of Mungyeong Gukpyeong (the standard apartment size) exceeded 420 million won?’” He added, “With supply falling short of demand, prices continue to rise.”

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The supply shortage has also played a key role in supporting the strength of Mungyeong’s housing prices. Mungyeong has had no new housing completions for three consecutive years, from 2023 through this year. Due to a worsening project financing (PF) environment, which has become pronounced in small provincial cities, there have been no new apartment launches for several years.

The trend of existing apartments “closing the gap” with the prices of new developments in surrounding areas has also become more pronounced. The 82-square-meter unit at “Mungyeong Mojon Coreu Noble 36,” completed in 2022, was sold last month for 420 million won, setting a new record. This is an increase of 81.89 million won compared to the previous record of 338.11 million won in 2023.

Yeongju has also had no new housing completions in the past three years. However, the “Yeongju I-Park” (428 units) is scheduled for occupancy in the second half of this year, and “Yeongju Xi Signature” (763 units) will be ready next year, which is expected to ease the “new apartment drought.” Pre-sale rights for these complexes are being traded at a premium of 20 to 30 million won, indicating concentrated demand.

The market is divided on the unusual trend of provincial housing price increases outpacing those in the Seoul metropolitan area. Some attribute it to the expansion of transportation networks and development benefits drawing genuine demand, while others are skeptical, citing population decline and lack of jobs as reasons why the trend may not last in the long run.

Park Won-gap, senior real estate expert at KB Real Estate, pointed out, “In small and medium-sized cities, the number of transactions is so low that a few high-priced deals can exaggerate the statistical growth rate. For the upward trend to continue over the mid- to long-term, it will be necessary to attract industries and improve residential conditions at the same time.”