"Quick Sales 3 Cases → 77 Cases"… The Direction of House Prices in Gimpo, a 'Regulated Area'

Gimpo, Where House Prices Soared Short-Term Due to 'Balloon Effect', Designated as Adjustment Area on 20th
Urgent Sales Increase and Prices Seem to Adjust for Now
"Price Competition Among Sellers" VS "Buying Demand Continues Due to Seoul Jeonse Shortage"

Apartment complex in Gimpo, Gyeonggi-do [Image source=Yonhap News]

[Asia Economy Reporter Onyu Lim] "A quick sale price dropped by 50 million won in one day, but transactions have completely stopped. Still, there isn’t a flood of listings. It’s a market with many actual buyers, and the rental crisis in Seoul is severe." (An official from A Real Estate Agency in Janggi-dong, Gimpo)

Gimpo City in Gyeonggi Province, where housing prices surged due to the 'balloon effect,' was designated as a regulated area on the 20th. Since the government announced the regulation the day before, the local real estate market has rapidly frozen. Quick sale listings with prices lowered by tens of millions of won appeared in places like Janggi and Geolpo-dong, but buyers were hesitant to step forward.

Although transactions cooled immediately after the designation as a regulated area, opinions on future housing price trends are divided. A representative from B Real Estate in Geolpo-dong said, "Gimpo’s boom was actually until October," adding, "Moreover, since it has been designated as a regulated area, if transactions shrink, price competition among sellers will occur, inevitably lowering housing prices."

On the other hand, there are expectations for transportation benefits such as the Metropolitan Area Express Train (GTX), and the rental crisis in Seoul continues, leading some to predict that housing prices in Gimpo will continue to rise like other metropolitan areas. Kim Hak-ryeol, head of SmartTube Real Estate Research Institute, said, "In Gimpo’s case, especially as a market centered on actual buyers, the rate of price increase will slow but prices will not fall."

A clear change is the increase in quick sale listings in Gimpo. According to real estate big data company Apartment Real Transactions, there are currently 77 quick sale apartment listings in Gimpo, a sharp increase. Compared to 3 listings on the 18th, before the designation as a regulated area, this is an increase of 74 listings.

As quick sale listings accumulate, apartment prices are also adjusting for now. On the 19th, a 106㎡ (exclusive area) unit at Punggyeong Village Hangang Hanla Bivaldi in Unyang-dong sold for 520 million won (2nd floor). This is 130 million won less than the record price of 650 million won last month. It is also 30 million won cheaper than the previous 2nd-floor transaction at 550 million won. On the 19th, a unit of 84㎡ at Pungmu Central Prugio in Pungmu-dong sold for 750 million won, 70 million won lower than the 820 million won transaction on the 9th.

With the designation as a regulated area, regulations such as loan restrictions will tighten, inevitably shifting the market to favor buyers. However, due to the severe rental crisis in Seoul, the enthusiasm of people in their 30s to purchase mid- to low-priced apartments in the metropolitan area continues. The future direction of Gimpo’s housing prices is expected to be a contest between these two forces.

A representative from C Real Estate in Pungmu-dong said, "There are still almost no quick sale listings in this neighborhood," adding, "There is a perception that if one person starts lowering the asking price, housing prices will fall, so people seem reluctant to move easily."

Meanwhile, the Ministry of Land, Infrastructure and Transport held a Residential Policy Deliberation Committee meeting on the 19th and designated Gimpo as a regulated area. This was because housing prices surged sharply in the short term while avoiding regulations even as the entire Gyeonggi Province was designated as a regulated area under the June 17 real estate measures. Gap investors flocked to find the last supply in non-regulated areas, and tenants who could not afford the soaring Seoul rental prices also gathered. According to the Korea Real Estate Board, apartment sales in Gimpo City last month were 2,373 cases, a 37.2% increase from 1,729 cases the previous month.