“Gangneung” Brand Apartment Supply Scheduled, “Sokcho Watch Out”

Gangneung City is considered one of the representative cities of Gangwon Province, along with Chuncheon and Wonju. It was the host region for the Pyeongchang Winter Olympics, and in 2017, the KTX opened, making it possible to travel to Seoul within two hours. The city also gained attention as land prices soared after being selected as the venue for the Pyeongchang Winter Olympics.

However, despite these favorable conditions, the real estate market in Gangneung remained quiet. Industry experts attributed this to the lack of supply of first-tier construction company brand apartments compared to Chuncheon, Wonju, and Sokcho. Due to the low supply of new apartments, transactions within the region were sparse, and interest from external investors declined.

Sokcho, a neighboring city with smaller area and population than Gangneung, is already experiencing a real estate boom. New apartment prices rank first in the Gangwon region. The price of pre-sale rights for an 84㎡ unit has long exceeded 500 million KRW.

According to data from Real Estate 114, the apartment with the highest price per 3.3㎡ among Gangwon Province’s move-in apartments is Sokcho City’s ‘Sokcho Cheongho I-Park’ (moved in October 2015), priced at 10.53 million KRW per 3.3㎡. The pre-sale right for an 84㎡ unit of ‘Sokcho The Ocean Xi,’ sold in May this year, had a premium of over 100 million KRW as of September, trading at 626.03 million KRW.

The reason Sokcho is enjoying a real estate boom is partly due to the concentrated supply of brand apartments over the past five years. With new apartments supplied mainly by first-tier construction companies, the subscription market revived and transactions increased. Additionally, since 2017, as housing regulations were imposed mainly in the metropolitan area, external investors seeking to invest in brand apartments in non-regulated areas flocked in, heating up Sokcho’s real estate market.

Sokcho City started with the brand apartment ‘e-Pyeonhansesang Yeongnangho,’ the first brand apartment sold in 11 years since ‘Sokcho e-Pyeonhansesang’ in 2004. In the same year, ‘Sokcho Cheongho I-Park’ was sold, followed by ‘Sokcho Xi’ in 2017, ‘Hillstate Sokcho Central’ in 2018, and in 2020, ‘Sokcho 2nd I-Park,’ ‘Sokcho The Ocean Xi,’ and ‘Sokcho Lotte Castle in the Sky’ were sold consecutively. Among the 17 complexes sold in Sokcho over the past five years, seven are apartments by first-tier construction companies.

In contrast, Gangneung was different. Among the 13 new complexes sold in Gangneung from 2015 to the present (October), the only one supplied by a first-tier construction company was ‘Gangneung I-Park,’ sold in December 2017. The subscription competition rate was also highest for ‘Gangneung I-Park,’ averaging 5.27 to 1 (closed within the ranking) among the 13 complexes.

An industry expert said, “Following Chuncheon and Wonju, brand apartments are gradually entering Sokcho, attracting not only local demand but also external investors, causing the previously undervalued Gangwon real estate market to heat up. When brand apartments are supplied, the regional value increases, which positively affects housing prices, and there is a tendency for prices to rise further after move-in.”

Following Sokcho, Gangneung’s real estate market has recently been showing signs of revival. House prices, which had been rising slightly, have been sharply increasing since August this year.

According to the Ministry of Land, Infrastructure and Transport’s actual transaction prices, the ‘LH Seonsuchon 8 Complex’ in Yucheon-dong, Gangneung, completed in November 2018, saw its 84㎡ unit traded at a maximum of 450 million KRW in October. The price rose by 80 million KRW in two months from 371 million KRW in August, surpassing 400 million KRW.

The 81㎡ unit of ‘Gangneung I-Park’ in Songjeong-dong, Gangneung, was traded at 370 million KRW (20th floor) in September. The sale price for this type at the time of pre-sale was 268 million KRW. Since its completion in December last year, the price has risen by over 100 million KRW. The 84㎡ unit of ‘Hillstate Gangneung’ located in Hoesan-dong, Gangneung, also rose to 337 million KRW in September. The price, which had been in the high 200 million KRW range until August, completely exceeded 300 million KRW from September.

External investors have also increased. According to the Korea Real Estate Board, as of September, 23.2% of apartment buyers in Gangneung were non-local residents. Compared to 19.8% in September last year, this is an increase of 3.4 percentage points. Among non-local residents, the proportion of Seoul residents was 29.00% as of last September. One in three non-local buyers invested from Seoul.

A representative from Gyodong D real estate agency said, “Since 2 to 3 months ago, news of first-tier construction company brand apartment supply in Gangneung has spread, and investors are trying to secure properties before prices rise. As the effect of brand apartment supply on the real estate market has already been proven in Sokcho, there are many inquiries from other regions for investment purposes. When brand apartments are supplied, prices of those apartments rise, and nearby existing apartments tend to rise together, so apartment prices in Gangneung are expected to continue rising for some time.”

As a result, GS Construction’s ‘Gangneung Xi Fine Venue,’ scheduled for sale in Naegok-dong, Gangneung, in November, is attracting strong interest. According to industry insiders, inquiries come not only from Gangneung residents but also from the Seoul Gangnam area.

A sales official said, “As Xi brand apartments have gained great popularity in Chuncheon and Sokcho, there is a lot of interest in Gangneung Xi Fine Venue, which is being sold for the first time in Gangneung. We will present excellent products worthy of the brand’s reputation to increase resident satisfaction.”