This Year, 32 Trillion Won in Land Compensation Will Be Released... Concerns Over Housing Price Surge

New Town Changneung District

A private real estate company analysis revealed that the land compensation to be distributed nationwide this year will reach 32 trillion won. There are concerns that the liquidity released into the market could flow back into the real estate market, potentially stimulating housing prices.

According to 'Jijon,' a land compensation and real estate development information platform, as of the 26th, there are a total of 92 project districts nationwide scheduled for land compensation this year, including public housing districts, urban development projects, industrial complexes, and research and development special zones and investment promotion districts. The estimated amount of land compensation to be distributed in these areas is 30.5628 trillion won. In terms of area, it covers 61.83 square kilometers, which is more than 21.3 times the size of Yeouido.

Including the scale of land compensation for social overhead capital (SOC) projects executed annually by the government (typically 1.5 trillion won), the total amount of land compensation to be distributed nationwide this year is expected to reach 32.0628 trillion won.

By region, the amount to be distributed in the Seoul metropolitan area is 25.7804 trillion won, accounting for 84% of the total (30.5628 trillion won excluding SOC land compensation). There are five areas where land compensation exceeding 1 trillion won will be distributed: Goyang City (6.713 trillion won), Namyangju City (6.097 trillion won), Yongin City (4.8786 trillion won), Bucheon City (2.3447 trillion won), and Ansan City (1.4617 trillion won).

Some voices warn that land compensation money could flow back into the real estate market, potentially stimulating it. The impact on the Seoul metropolitan area's real estate market, which has recently stabilized, is expected to be significant. The government plans to actively utilize 'Daeto compensation' to curb cash liquidity. Daeto compensation is a system where landowners whose land is acquired for public development are compensated not with cash but with other land in the same area. However, contrary to government expectations, most land compensation is still likely to be paid in cash. Previously, the contract rates for Daeto compensation in Hanam Gyosan District and Incheon Gyeyang District were only about 12% and 10%, respectively.