[Visiting the 3rd New Town] "Once the subway is connected, it's Seoul"... Bucheon Daejang's 'Sangjeonbyeokhae' Expectations Rise

With Bucheon Daejang District designated as a public housing district on the 25th, the government’s projects for the five 3rd generation new towns in the metropolitan area, whose candidate sites were finalized last May, have entered the main track. The total housing supply from the 3rd generation new towns designated as ▲Namyangju Wangsuk ▲Goyang Changneung ▲Hanam Gyosan ▲Incheon Gyeyang ▲Bucheon Daejang is 173,000 units. Although there are no semi-Gangnam-level new towns like Pangyo and Wirye from the 2nd generation new towns, most of the 3rd generation new towns are located on the Seoul city boundary, earning high marks for their location. In particular, the government plans to implement a 'pre-application system' that accepts applications before the main sale from the end of next year for some new towns with early district designation, creating an atmosphere where homebuyers are already strategizing for subscriptions. However, since the project is just beginning, differences in demand preferences are expected to emerge for each new town as major issues such as transportation measures and land compensation are addressed. Asia Economy examines the location, atmosphere, prospects, and challenges of the five 3rd generation new towns through vivid on-site reporting.

Bucheon Daejang District Panorama (Photo by LH)

[Bucheon=Asia Economy Reporter Moon Jae-won] "Once the urban railway is connected, it’s practically Seoul. Although interest has surged since the 3rd generation new town was confirmed last year, apartment prices have risen relatively less, but if additional transportation measures come out, housing prices will double." (Representative of Real Estate Agency A in Ojeong-dong, Bucheon, Gyeonggi)

On the 25th, when Bucheon Daejang District was designated as a public housing district, real estate agencies in Ojeong-dong, Bucheon, one of the closest residential areas to Daejang District, were relatively quiet. This was quite different from the atmosphere right after the Ministry of Land, Infrastructure and Transport announced the new town candidate sites last May, when a flood of investment inquiries poured in.

Representative A of the Ojeong-dong agency said, "The district designation was already anticipated, so it’s been quiet." However, since the district designation marks the official start of the project, local forecasts expect inquiries about nearby rental listings and the current atmosphere to increase again.

◆From Farmland to New Town... Expectations for a Drastic Change= The district is located between Gimpo Airport and the Gyeongin Expressway. Administratively, it spans Daejang, Ojeong, and Wonjong-dong areas. The total area is 3.43 million square meters, smaller than Gunpo Sanbon New Town (4.2 million square meters), the smallest among the 1st generation new towns. Currently, most of the area is farmland, giving it the atmosphere of a 'rural village within the city' with hardly any notable buildings.

Because of this, expectations for development are high. A local resident said, "Although Bucheon is relatively close to Seoul, there has been a strong perception of neglect, but once the new town is established, the atmosphere will completely change," adding, "There is a lot of demand to move into the Daejang new town even within Bucheon." The Ministry of Land plans to build 20,000 housing units here and establish a metropolitan transportation system centered on the S-BRT, creating a 'corporate belt' connecting Incheon Gyeyang and Seoul Magok.

Above all, local residents expect the district’s recognition to rise significantly as a large-scale residential belt of 40,000 households will be formed once the development of nearby Incheon Gyeyang District (17,000 units) and the Ojeong-dong U.S. military base relocation area (3,700 units) is completed. The Ojeong-dong U.S. military base plans to complete relocation by 2022 and start sales the following year, on a similar timeline to Daejang District.

Apartment complexes in the Ojeong-dong area of Bucheon City. Since the Daejang district in Bucheon was designated as the 3rd new town in May last year, many prospective buyers aiming for subscription have moved in, causing a shortage of jeonse (long-term lease) properties in this area. (Photo by Moon Jewon)

◆Strong Surrounding Housing Prices, Steady In-Migration Demand= According to the industry, many buyers are already coming to Bucheon to seize sales opportunities in preparation for the 3rd generation new town pre-application starting as early as the end of next year.

Representative B of Ojeong-dong agency said, "There is a lot of interest from outsiders, but since listings are scarce, it is almost impossible to find rental properties." The price of a 59.95㎡ unit (exclusive area) in Bucheon Humansia Complex 3, close to Daejang District, reportedly rose by about 100 million KRW in one year since last May.

In Bucheon, this is the first new town development supply in a long time since the completion of Sangdong District in 2003, which was called a 'mini new town,' so alternative demand is expected to be considerable. Especially, in the 1st generation new town Jungdong New Town, where residents have lived for over 25 years, replacement demand from aging apartment residents is significant. Demand from residents of the adjacent Incheon Gyeyang District is also expected to be substantial.

According to a survey by the Korea Real Estate Board, apartment prices in Bucheon have been rising for 40 consecutive weeks since July last year. Incheon Gyeyang-gu also maintains a steady upward trend, rising 0.27% last week amid expectations for redevelopment projects.

◆The Key is the Transportation Network= However, it is pointed out that an urban railway line connecting to Daejang District is essential for the success of the new town. Currently, there is no railway line passing through Daejang District. Seoul and Bucheon cities are promoting the Wonjong-Hongdae Line connecting Seoul and Bucheon, targeting opening in 2030, but it is still at the preliminary feasibility study stage. The urban railway connecting Wonjong to Daejang District is still in the conceptual stage.

A Bucheon city official explained, "The preliminary feasibility study for the Wonjong-Hongdae Line started this year, so results are expected in at least 1 to 2 years," adding, "The urban railway to Daejang District is currently under study, but it can only be extended after the Wonjong-Hongdae Line is confirmed, so nothing has been decided yet."

A Ministry of Land official also said, "The Wonjong-Hongdae Line cannot yet be considered a confirmed project," but added, "However, the S-BRT connecting Gimpo Airport Station and Bucheon Sports Complex Station is included in the core metropolitan transportation improvement measures for Bucheon Daejang and Incheon Gyeyang and is being promoted."

Representative C of a local agency said, "Although the government has announced various transportation measures and promised quick implementation, looking at the nearby Geomdan New Town, which is continuously delayed, it’s uncertain when it will actually be completed," warning, "If a proper railway network is not established, it could be shunned by potential buyers."