Balloon Effect Movement as Kimpo and Busan Regulations Implemented
Housing Prices Rise in Busanjin-gu, Ulsan, Paju, Changwon
Government Excludes Areas from Regulation Despite Knowing Price Increase
Immediate Designation as Adjustment Area if Overheating Worsens
[Asia Economy Reporter Moon Jiwon] Apartment prices in Paju, Gyeonggi Province, Busanjin-gu in Busan, and Ulsan, which were excluded from the government's designated regulated areas, are rising sharply. Analysts say that the ongoing government 'pinpoint regulations' are causing a balloon effect to shift here and there, creating confusion in the nationwide real estate market.
According to the weekly apartment price trend for the fourth week of November announced by the Korea Real Estate Board on the 27th, as of the 23rd, the apartment price increase rate in Paju, a non-regulated area in the metropolitan area, expanded from 0.78% last week to 1.06%.
Apartment prices in Changwon, Gyeongnam, rose 1.01% this week, marking the largest increase since the Korea Real Estate Board began compiling the statistics, and apartment prices in Ulsan also rose 0.65% compared to the previous week, showing a relatively large increase. In particular, Seongsan-gu in Changwon showed a clear upward trend in housing prices even among the eight provinces, with the apartment price increase rate expanding from 1.95% to 1.98%.
The reason for the sharp rise in housing prices in these areas is the balloon effect of buying demand shifting from regulated areas to non-regulated areas. When the Ministry of Land, Infrastructure and Transport newly designated Gimpo in Gyeonggi Province, Haeundae, Suyeong, Dongnae, Yeonje, and Nam-gu in Busan, and Suseong-gu in Daegu as adjusted target areas on the 19th, housing prices in nearby areas rose.
In fact, record prices are emerging in Unjeong New Town in Paju. The 'Unjeong New Town Central Prugio' 84㎡ (exclusive area) in Mokdong-dong, Paju, was traded at 865 million KRW on the 14th, setting a new record price. The head of nearby real estate agency A said, "Since the announcement of the regulated areas, buying demand has been gathering more."
Even in Busan, as regulation began in Haeundae-gu and others, the overall apartment price increase rate shrank, but areas with weaker regulations such as Busanjin-gu (1.03%) and Geumjeong-gu (0.94%) saw an expansion in the upward trend. In Daegu as well, except for Suseong-gu, which was designated as a regulated area, most regions saw an increase in the rate of price rise.
If the balloon effect continues, there is also a possibility that these areas will be designated as regulated areas. The Ministry of Land, Infrastructure and Transport explained on the 19th, "In some areas such as Ulsan, Cheonan, and Changwon, the recent increase has expanded mainly around redevelopment and reconstruction complexes. However, considering the price decline trend in these areas that continued until last year, they were not designated as adjusted target areas this time."
It added, "We will closely monitor these areas and immediately consider designating them as adjusted target areas if concerns about overheating intensify."
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