'Daedaegwang' Also Shows Abnormal Trends... Go or Stop?

'Daejeon, Daegu, Gwangju' Supported Local Housing Market Last Year
Gwangju Down 0.01%, Daegu Enters Downturn, Daejeon Also Slows

Subscription Remains Overheated... Urban Redevelopment Prospects Still Present

[Asia Economy Reporter Lee Chun-hee] An unusual trend is emerging in the housing prices of the 'Dae-Dae-Gwang' (Daejeon, Daegu, Gwangju) regions, which have supported the local housing markets. Housing prices have turned downward not only in Daegu, where COVID-19 cases have been concentrated, but also in Gwangju amid the spread of the novel coronavirus infection.

According to the Korea Real Estate Board's weekly apartment sales price index on the 6th, as of the 30th of last month, housing prices in Gwangju fell by 0.01%. Gwangju's housing prices had maintained an upward or stable trend since September 30 of last year but have entered a downward trend after 26 weeks. Earlier, Daegu had already seen a full-fledged decline starting early last month. Daegu's prices dropped by 0.03% on the 2nd of last month, marking 24 weeks since September last year, and have continued to decline for five consecutive weeks.

In the case of Daejeon, prices rose by 0.20% last week, maintaining an apparent upward trend, but actual transaction prices have been falling in major complexes in Doan New Town and downtown areas. The actual transaction price of Doan Verdiom 85㎡ (exclusive area) in Doan-dong, Seo-gu, which had surged to 650 million KRW in January, dropped to 490 million KRW last month. Nearby, Doan I-Park 85㎡ also fell from 630 million KRW in January to 549 million KRW last month. The actual transaction price of Clover Apartment 85㎡ in Dunsan-dong, Seo-gu, which had soared to 810 million KRW last year, was recently traded at 700 million KRW.

However, even in these regions, a gap between the transaction and subscription markets is appearing, similar to the metropolitan area. 'Banwoldang Station Seohan Forest' in Jung-gu, Daegu, which was supplied last month, recorded an average competition rate of 119 to 1 with 12,082 applicants for 101 units in the first-priority subscription. 'Cheongna Hills Xi' in Jung-gu, Daegu, also had a competition rate of 141 to 1 at the time of its early last month supply.

Daejeon and Gwangju also have redevelopment supply projects lined up in urban areas. In Daejeon, reconstruction projects are pending for Tanbang 1 District in Seo-gu (1,947 units), Yongmun 1, 2, and 3 Districts (2,763 units), and supply is awaiting for Gapcheon Waterfront District Block 1 (1,118 units) and Block 2 (928 units).

An official from the maintenance industry said, "As seen in the case of Suwon, when urban areas with well-established infrastructure such as education and transportation are redeveloped, demand inevitably gathers," adding, "It is highly likely that redevelopment will offset downward pressure."