"School Districts Lead the Way"... Provincial Apartment Prices Rebound After 100 Weeks, Driven by Top Educational Areas [Real Estate AtoZ]

Clear Upward Trend in Educational Districts After October 15 Policy
Haeundae in Busan Rises 0.29%... Rebound Driven by Combination of Private Academies and New Apartments
Nam-gu in Gwangju, Nam-gu in Ulsan Lead Regional Increases
Daegu Ends 101-W

Apartment prices in certain provincial areas are showing unusual trends. Locations that had experienced a downward trend for over two years are now reversing and showing signs of recovery. The common factor among these areas is their reputation as top educational districts. During the prolonged downturn, these school districts helped defend prices, and now they are leading the market rebound as well. However, some analysts warn that as demand for good school districts becomes concentrated in specific regions, polarization within provincial areas may intensify.

High-rise apartments in Marine City, Haeundae-gu, Busan. Yonhap News.

According to the 'Weekly Apartment Price Trends for the First Week of November' released by the Korea Real Estate Board on November 12, the apartment sales price change rate for provincial areas recorded 0.01%. This marks the first increase in 100 weeks since the market turned downward in the fourth week of November 2023. A rebound is also being observed in individual regions. Busan, which ended its 171-week decline, has risen for two consecutive weeks (0.02%→0.03%), and Gwangju also rebounded for the first time in 77 weeks (0.01%). Ulsan jumped by 0.11%, recording the highest increase among the major provincial cities.

All the regions experiencing an upward trend are school districts. In particular, an analysis of the Korea Real Estate Board statistics for the two weeks following the October 15 real estate policy shows that price recovery is especially pronounced in the core school districts of major provincial cities. Nam-gu in Ulsan posted a cumulative increase of 0.30% over the past two weeks, ranking first among all districts in provincial metropolitan cities. This area, which includes Ok-dong and Sinjeong-dong, is home to numerous private academies and prestigious schools and is known as the "educational hub of Ulsan."

The strength of school districts is also evident in Busan. Haeundae-gu rose by 0.29% over the past two weeks, ranking first in Busan. The Centum and Jwa-dong areas, where new apartments and private academies are clustered, have emerged as new educational hotspots. Dongnae-gu, a traditional school district in Busan, also rose by 0.16% during the same period, recording the third-highest increase in the city. In Gwangju, Nam-gu, where Bongseon-dong is located, rose by 0.09% over the past two weeks, ranking first in Gwangju. This area is often referred to as "Daechi-dong of Gwangju" due to its strong educational demand.

A similar trend is observed in Daegu. Although Daegu has been in decline for 101 consecutive weeks, Suseong-gu, home to clusters of private academies in Beomeo-dong and Hwanggeum-dong, rose by 0.01%. In the most recent survey, only two districts in Daegu-Suseong-gu and Jung-gu (0.08%)-recorded increases. The other six surveyed regions all saw declines. This suggests that school districts are holding up even during a prolonged downturn.

Ham Youngjin, head of the Real Estate Research Lab at Woori Bank, said, "You cannot discuss the provincial apartment market without considering school districts," adding, "A small number of school districts are raising the overall provincial average." He also noted, "The top priority in determining price is the school district, followed by the price of jeonse (long-term lease) and the volume of unsold units."

Market observers also interpret that the shift in demand following the October 15 policy has had an impact. As the policy effectively blocked gap investments (purchases with tenants in place) in popular areas of the Seoul metropolitan region, it is analyzed that real buyers with cash in provincial areas have started to move again.

Park Wongap, Senior Real Estate Specialist at KB Kookmin Bank, said, "The rebound in provincial areas is being led not by major Seoul investors, but by local demand within each region," adding, "There is a trend of 'relocation to preferred areas,' such as moving from Sacheon or Jinju to Haeundae in Busan." He further explained, "Even in provincial areas, the phenomenon of concentrating on a single desirable property is becoming stronger, and the tendency to focus on school districts is likely to intensify."