Rents Rise in 3rd Phase New Towns Goyang and Namyangju
Waiting Demand Increases Ahead of Pre-Subscription
Gyeonggi Subscription Account Sign-Ups Up 9% in One Year
[Asia Economy Reporter Moon Jiwon] The supply and demand for apartment jeonse (long-term lease) in the Seoul area is somewhat easing, but around the planned 3rd New Town sites, the jeonse supply remains unstable due to the waiting demand from prospective homeowners anticipating the pre-sale subscription. Popular areas such as Namyangju in Gyeonggi Province are still experiencing steep jeonse price increases, while the number of subscription savings account holders in the Gyeonggi area is also rapidly rising.
According to the weekly apartment price trend report by the Korea Real Estate Board on the 25th, Goyang and Namyangju in Gyeonggi Province, where the 3rd New Towns are being developed, recorded cumulative jeonse price increases of 1.56% and 1.21%, respectively, over three weeks this year. Compared to the average jeonse price increase rate of 0.77% in Gyeonggi Province during the same period, these figures are about twice as high.
The ongoing shortage of listings since last year, combined with the influx of demand aiming to meet residency requirements ahead of the 3rd New Town pre-sale subscription, is interpreted as the cause of the sharp rise in jeonse prices.
Among the 3rd New Towns, Hanam, which is the most preferred, showed the highest increase nationwide in average apartment jeonse prices per 3.3㎡, rising 50.2% over the past year according to KB Real Estate's housing price trend survey.
The anticipation for the 3rd New Towns is also reflected in the number of subscription savings account holders. According to the Korea Real Estate Board's subscription home data, as of the end of December last year, the number of housing subscription savings account holders in Gyeonggi Province was 6,794,457, an increase of 9.24% (575,160 people) from 6,219,297 at the end of the previous year. This growth rate contrasts with Seoul, where the number of account holders increased by 4.13% (243,955 people) from 5,898,345 to 6,142,300 during the same period. This is likely because waiting demand focused on the 3rd New Town subscriptions, which offer good accessibility to Seoul and relatively affordable prices, is concentrated in these areas.
The government also considers the smooth supply of the 3rd New Towns crucial for stabilizing housing prices and is accelerating the projects. In fact, the Ministry of Land, Infrastructure and Transport announced the day before that it plans to shorten land compensation for the 3rd New Towns by more than 10 months, reducing the period by about 4 years and 9 months compared to the 2nd New Towns. The government has also advanced the transportation network construction schedule by about 16 months on average, including preparing transportation measures immediately after announcing the locations of the 3rd New Towns.
The government plans to conduct pre-sale subscriptions sequentially starting with Gyeyang in Incheon in July, followed by Wangsuk in Namyangju in September-October, and Goyang Changneung and Bucheon Daejang in November-December. The total number of pre-sale subscription units until next year is 62,000. However, the industry points out that even if pre-sale subscriptions occur, the actual move-in timing does not change, making it difficult for jeonse and monthly rent prices to stabilize in the short term. An industry official said, "If the (3rd New Town) projects are delayed long-term, housing market instability could worsen due to buyer fatigue and increased additional housing demand."
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