Moon Administration's Real Estate Policy Failure Raised Housing Prices in Participatory Government's '2nd New Town'

Average Apartment Prices in 2nd Phase New Towns Soar 78.3%
From 18.88 Million to 33.68 Million KRW per 3.3㎡
Pangyo Up 18.43 Million, Gwanggyo Up 16.46 Million

[Asia Economy Reporter Ryu Tae-min] It has been revealed that the failure of the Moon Jae-in administration's real estate policy has driven up the prices of the 2nd phase new towns in the Seoul metropolitan area, which were supplied during the previous Roh Moo-hyun administration to stabilize housing prices, by nearly double in some cases. Over the four years since the Moon Jae-in administration took office, the average price per 3.3㎡ of apartments in 2nd phase new towns such as Wirye and Pangyo surged by 15 million KRW. In Pangyo New Town, the average price per 3.3㎡ rose by more than 18 million KRW, and even Hwaseong Dongtan New Town, which had experienced a price decline at one point, saw an increase of about 10 million KRW.

According to Real Estate 114 REPS on the 25th, the apartment prices in the 2nd phase new towns located in the metropolitan area rose from 18.88 million KRW per 3.3㎡ in May 2017, when the Moon Jae-in administration began, to 33.68 million KRW as of the 19th of this month, an increase of 14.8 million KRW. The average rate of increase reached 78.3%.

The area with the highest increase in apartment prices was Pangyo New Town. During this period, the average price per 3.3㎡ rose from 24.13 million KRW to 42.56 million KRW, an increase of 18.43 million KRW (76.3%). Even Gwanggyo New Town saw its average apartment price per 3.3㎡ nearly double, soaring 91.8% from 17.93 million KRW to 34.39 million KRW. Wirye New Town also saw prices rise from 23.26 million KRW to 39.07 million KRW, an increase of 15.81 million KRW (67.9%). In Dongtan New Town, prices increased from 12.5 million KRW to 21.19 million KRW, up 8.69 million KRW (69.5%).

According to the Ministry of Land, Infrastructure and Transport's actual transaction price system, the Prugio Granble apartment in Baekhyeon-dong, Pangyo New Town, with an exclusive area of 105.13㎡, was priced at 1.16 billion KRW in May 2017 when the current administration took office, but surged to 2.45 billion KRW last month, more than doubling in just over four years. Similarly, the Gwanggyo e-Pyeonhansesang 1st complex in Gwanggyo New Town, with an area of 101.93㎡, rose from 790 million KRW to 1.715 billion KRW during the same period, an increase of 925 million KRW.

Yoon Ji-hae, senior researcher at Real Estate 114, said, "These new towns have continuous transportation benefits and high accessibility to Gangnam, so demand has not ceased. Not only are there many newly built complexes with pleasant living environments, but the phenomenon of 'smart single-home ownership' to avoid regulations is also prominent, so prices are expected to rise further."

The rise in apartment prices in these 2nd phase new towns is comparable to the increase in the average price per 3.3㎡ of apartments in Seoul during the same period, which rose by 19 million KRW. The area in Seoul with the highest increase in apartment prices was Gangnam-gu, where the average price per 3.3㎡ rose from 43.97 million KRW to 74.92 million KRW, an increase of 30.95 million KRW (70.4%). This was followed by Seocho-gu (38.31 million KRW → 64.7 million KRW), Songpa-gu (28.7 million KRW → 53.48 million KRW), and Seongdong-gu (23.06 million KRW → 47 million KRW).