[Practical Finance] Will the 3rd Phase New Town Bring Relief to the Dried-Up Housing Supply?

Main Subscriptions for Goyang Changneung and Other 3rd Phase New Towns Begin Sequentially This Month

The main subscription for the 3rd phase new towns will begin one after another this year. Following Goyang Changneung District, which recently finalized its subscription schedule, Hanam Gyosan, Bucheon Daejang, and Namyangju Wangsuk will sequentially start accepting subscriptions from next month and in the second half of the year. Unlike the 1st and 2nd phase new towns, these projects are based on the Special Act on Public Housing, and since a significant number of units have already found owners through preliminary subscriptions, some expect market interest to be lower.

Nevertheless, due to better accessibility to Seoul compared to existing new towns and the expected price competitiveness under the price ceiling system compared to nearby market prices, subscription competition is anticipated to be fierce. Especially as private housing supply is likely to decrease significantly this year, public housing including new towns is expected to play a vital role as a refreshing supply of housing. According to the Korea Land and Housing Corporation (LH) on the 5th, the planned supply of 3rd phase new towns by the end of this year reaches 8,000 households. However, excluding those already subscribed in the preliminary phase, the general subscription will proceed. For the three blocks (A4, S5, S6) in Goyang Changneung accepting applications in mid-month, a total of 1,792 households will be developed, but only 391 units will be offered excluding the preliminary subscription units.

The sale prices are likely to be set relatively higher than during the preliminary reservation. The increase in construction costs has been reflected in the prices. For an exclusive area of 84㎡, the price is around 770 million KRW, about 100 million KRW higher than the initially estimated 670 million KRW. Nevertheless, since apartments of the same size in nearby complexes have been traded at around 900 million KRW, it is expected that buyers can secure a home about 100 million KRW below market price.

This area has attracted early interest among the 3rd phase new towns due to its good accessibility to Seoul. It borders the boundary between Seoul's Eunpyeong and Mapo districts. At the time of designation, there was strong opposition from residents of Ilsan and Unjeong areas, arguing that the new town should be located farther than the 1st and 2nd phase new towns.

The GTX (Great Train Express) Line A passes through the center of this new town. Nearby GTX stations include Daegok Station, Goyang City Hall Station, and Saejeol Station. The area benefits from excellent metropolitan transportation conditions such as the Seoul-Munsan Expressway and the Gyeongui-Jungang Line, and just a short distance west lies the Metropolitan Area 1st Ring Expressway and the circular railway network. The overall spatial plan for the city was selected through an external competition involving architectural firms from Korea and the United States. The plan includes creating a transportation environment centered on public transit such as the Bus Rapid Transit (BRT) system and developing a waterfront park along Changneungcheon Stream as a local landmark.

Minister of Land, Infrastructure and Transport Park Sang-woo is conducting an on-site inspection of the 3rd phase new town, Goyang Changneung district, on the 27th. Provided by the Ministry of Land, Infrastructure and Transport. Photo by Yonhap News.

In Hanam Gyosan, about 1,100 households are scheduled for subscription next month. It is a highly preferred area adjacent to the Seoul Gangdong and Songpa living zones. The subway Line 5 is nearby, and Line 3 is being extended with two new stations planned. The A2 block coming out this year is about one block away from Hanam Geomdansan Station on Line 5 and has good reviews due to nearby shopping facilities. The metropolitan transportation network includes proximity to the Metropolitan Area 1st Ring Expressway and the Jungbu Expressway.

In Bucheon Daejang New Town, about 2,000 households will enter the main subscription this year. The supply is divided into newlywed hope town units (A5, A6) and general public housing units (A7, A8). It is close to the metropolitan circular railway network and the Metropolitan Area 1st Ring Expressway, with access to Bucheon Sports Complex Station and Gimpo Airport Station (Line 5). Plans are underway to build the Daejang-Hongdae Line targeting opening in 2030. The Gwangmyeong-Seoul Expressway is also planned. To improve accessibility to Seoul and surrounding industrial complexes, new transportation means such as BRT will be introduced, along with plans for underpasses and interchanges.

Namyangju Wangsuk, scheduled for the second half of this year, includes six complexes mainly in the northern part of District 1 such as A1, A2, B1, and B2, with about 3,100 households available for subscription. This is the largest among the main subscription complexes coming out this year. Although it is considered to have relatively insufficient living infrastructure and metropolitan transportation compared to other new towns, GTX-B Line and the extension of Subway Line 9 are being pursued. Wangsuk District 1 is about 3.5 km from Seoul and borders areas such as Byeollae and Dasan. For District 2, with the opening of the urban railway connecting Gangdong, Hanam, and Namyangju and new stations on the Gyeongui-Jungang Line, metropolitan transportation conditions for both Seoul Gangnam and Gangbuk areas are expected to improve significantly. LH estimates that once the new town is fully developed after 2028, it will accommodate about 66,000 households and a population of approximately 166,000.

Outside of new towns, about 13,000 households in public land development districts in the metropolitan area will also find owners. A highly anticipated area in the market is Gwacheon Juam, with about 1,600 households planned. It offers convenient access to Seoul Gangnam and is close to the subway. GTX-C Line and Wirye-Gwacheon Line are also being pursued. The surrounding environment is favorable with mountains and parks, and nearby development areas such as Gwacheon District and Seoripul District are expected to be developed around the same time. In Hwaseong Dongtan 2, about 3,300 households will be released, and about 500 households in Pyeongtaek Godeok. The only complex coming out in Seoul is Magok District 10-2.

Since the government prioritized accessibility and transportation networks when designating the 3rd phase new towns and public land development districts, the locations themselves are considered favorable. The know-how accumulated during the development of the 1st and 2nd phase metropolitan new towns is also regarded as a solid asset. The enhancement of self-sufficient functions through expert group competitions involving local governments, local public enterprises, and external design firms is also noteworthy. The main concern among actual demanders is the sale price. Due to increases in construction costs, prices have risen about 10-20% compared to the preliminary subscription phase, causing many to give up on subscriptions in some complexes during the main subscription. However, since these new towns are also being promoted with the primary goal of stabilizing housing prices in the metropolitan area, it is expected that prices will not be raised unilaterally.