[Practical Finance] Apartment Prices Near GTX Golden Train... Still Worth Knocking and Boarding

Apartment Prices Soar Over 100 Million Won in Uiwang, Ansan, Gunpo
New Housing Site Designations and GTX Development Boost
Homeowners Withdraw Listings Expecting Further Price Increases
However, Some Warn of 'Bubble' Due to Excessive Pre-Reflection

As the government accelerates the Metropolitan Area Express Railway (GTX) project, demand from buyers for apartments near GTX stations is increasing. Expectations of significantly improved transportation in the future have led to a rise in purchase inquiries and a decrease in available listings. In some areas such as Uiwang in Gyeonggi Province, apartment values have surged, with asking prices rising by 100 million to 200 million KRW within a few days. However, since the GTX project’s opening date may be delayed and there are analyses suggesting a bubble in nearby apartment prices due to steep price increases, caution is advised when investing.

"Station Coming" Uiwang and Ansan Apartment Prices Soar

According to the real estate industry on the 1st, apartment prices near the GTX lines in Uiwang, Gunpo, and Ansan have been rapidly rising since the government recently announced plans to develop new public housing sites nearby. The Ministry of Land, Infrastructure and Transport designated these areas as new housing sites and stated that it is considering having GTX-C line stop at Uiwang Station. Once GTX-C opens, it will take 20 minutes from Uiwang Station to Yangjae Station and 25 minutes to Samsung Station. Transferring to GTX A line at Samsung Station allows access to Seoul Station within 35 minutes. This effectively transforms the southwestern metropolitan area into a Seoul living zone.

As a result, asking prices for apartments in Uiwang have sharply increased. For example, an 84㎡ unit at Uiwang Park Prugio in Samdong, Uiwang City, was sold for 940 million KRW on the 21st of last month, but current asking prices range from 1 billion to 1.2 billion KRW, an increase of over 100 million KRW. A representative from nearby A Real Estate Agency said, "The asking prices have risen significantly following the near confirmation of GTX-C stopping at Uiwang Station," adding, "There is a mood of listings coming in with expectations that prices may rise further."

The real estate market near Indeogwon Station, where the GTX-C line stop has already been confirmed, is also hot. An 84㎡ unit in Indeogwon Central Xi 1st Complex in Naeson-dong, Uiwang City, was mainly traded in the 1.1 billion KRW range in June but recently sold for 1.2 billion KRW, with current asking prices rising to 1.4 billion KRW. Similarly, an 84㎡ unit in Naeson-dong’s Raemian Everhaim, which previously traded in the 900 million KRW range, now has asking prices around 1.3 billion KRW. Prices were already on the rise before the decision to establish Indeogwon Station, but with the GTX benefit confirmed, homeowners expecting further price increases have raised asking prices dramatically.

Apartment prices in Gunpo and Ansan are also rising steeply. For example, a 74㎡ unit in Geumgang Pentarium Central Park in Domagyo-dong, Gunpo, was traded for 500 million KRW earlier this year but recently sold for 730 million KRW, an increase of over 200 million KRW in eight months. The current asking price exceeds 800 million KRW. In Hwaseong Jinan, where new housing sites were designated and GTX transportation measures announced, purchase inquiries are reportedly flooding in. The Ministry of Land stated that a transfer system between the Shinbundang Line and Dongtan Tram (GTX-A) will be established here. This would reduce travel time to Gangnam Station to about 50 minutes and Seoul Station to about 45 minutes. Following this expectation, asking prices for an 84㎡ unit in Darammaeul LG Taean Xi in Jinan-dong, Hwaseong, have risen from around 500 million KRW to 600 million KRW since the announcement.

GTX Budget 1.86 Trillion KRW... Project Speeding Up Next Year

The government’s increased budget allocation for the GTX project is also expected to influence buying momentum. Reviewing the 2022 budget approved at the Cabinet meeting on the 31st of last month, the government allocated 1.8597 trillion KRW for metropolitan and urban railway projects, which is over 600 billion KRW more than the 1.2143 trillion KRW allocated this year, to ensure smooth progress of the A, B, and C lines. Breaking down by section, the A line (Paju-Samsung-Dongtan) received 460.9 billion KRW, the B line (Songdo-Maseok) 80.3 billion KRW, and the C line (Deokjeong-Suwon) 103 billion KRW. The A line budget reflects timely completion with sufficient construction costs, while investments for the B and C lines will be intensified to facilitate smooth private sector participation.

If you are planning to purchase an apartment, considering properties near GTX lines might be worthwhile. For the A line, Paju Unjeong New Town is a representative investment area. It benefits from the Gyeongui-Jungang Line and the extension of Line 3, offering good transportation and eligibility for subscription to residents of Seoul, Incheon, and Gyeonggi Province alike. For the B line, Incheon Songdo and Bupyeong are notable. The government designated Incheon Guwol 2 District as a third new housing site, where a transfer system will be established between the B line (planned Incheon City Hall Station), Incheon Subway Lines 1 and 2, and Incheon Terminal. This will enable arrival at Yeouido and Seoul Station within 30 minutes. The C line includes Uijeongbu Station. Since prices in Seoul’s outskirts have risen too much, purchasing newly built properties in Gyeonggi Province with good transportation is considered a good option.

The view of the Unjeong New Town area in Paju City [Image source=Yonhap News]

Preemptive Price Increase... Bubble Concerns

However, there are voices urging caution when investing, as apartment prices have risen excessively fast. Although there are benefits from GTX, some areas appear to be overvalued to the point of a bubble. A real estate expert said, "Even considering the GTX effect, the price increase is too steep," adding, "GTX will take a long time to complete, but the benefits seem to be overly preemptively priced in."

In fact, given the large-scale nature of GTX construction, there is a possibility of delays in opening. For the earlier 2nd phase new towns, it took an average of 9.1 years from the first move-in to the opening of major railway lines due to delays in government transportation measures. There are significant concerns that transportation network construction may also be delayed in the 3rd phase new towns currently under construction. If GTX is not built on time, traffic congestion may occur later in areas being developed as new housing sites.

Among the lines, the A line project has progressed the most but its construction rate still falls short of targets, while the B line is still at the basic planning stage. There are evaluations that profitability is not high, so it may take more time before construction begins. The C line consortium led by Hyundai Construction was selected as the preferred negotiator in June and is currently in negotiation stages. Since there are significant local interests regarding additional stops on the C line, negotiations may take longer. A Ministry of Land official responded to questions about whether housing supply in new housing sites can be matched despite GTX project delays by saying, "We will proceed with the process as quickly as possible according to procedures to ensure supply without disruption."