Jinju Apartment Prices Surpass Previous Peak After 8 Years... 'Balloon Effect' Spreads Across Bu-Ul-Gyeong [Real Estate A to Z]

Ninth Regional Market Recovers Highs...
Bu-Ul-Gyeong Rebound Gains Momentum
Innovation City Values Surge
on Aerospace Industry Demand
Migration of Public Sector Employees
and Middle Class Fuels Jinju's Rise
Record-High Prices Driven by

Apartment prices in Jinju, the largest city in western Gyeongsangnam-do, have surpassed their previous peak for the first time in eight years. This marks the first time a non-metropolitan area has broken through its previous high since the October 15 real estate policy measures. The combination of strong internal demand centered around the innovation city, an influx of new residents following the opening of the Korea Aerospace Administration, and a recent return of demand due to strengthened regulations in the Seoul metropolitan area has made Jinju a key pillar in the rebound of the Busan-Ulsan-Gyeongnam (Bu-Ul-Gyeong) region.

'Jinju Innovation Jungheung S-Class The First' located in Chungmugong-dong, Jinju Innovation City. Recently, the actual transaction price for the exclusive 113㎡ unit exceeded 1 billion KRW. Gigi Auction.

According to the Korea Real Estate Board's "Weekly Apartment Price Trend for the Third Week of November" released on November 25, Jinju's apartment sales price index rose 0.21% from the previous week to 102.87. This surpassed the previous all-time high of 102.81 recorded in the second week of November 2017, breaking the record after about eight years. During the Moon Jae-in administration (2017-2022), when nationwide housing prices surged, only eight cities had recovered their previous peaks: Donghae in Gangwon, Jecheon in North Chungcheong, Nonsan in South Chungcheong, Wansan and Deokjin in Jeonju, and Yeongju, Sangju, and Mungyeong in North Gyeongsang. With Jinju joining, the number has increased to nine. Notably, Jinju is the first non-metropolitan city to surpass its previous peak since the October 15 policy measures.

The factors driving Jinju's housing prices have originated both within and outside the region. First, the relocation and establishment of the Korea Land and Housing Corporation (LH) headquarters had a significant impact. As school districts were established and leading apartment complexes were built in the innovation city, internal demand was absorbed. Public institution employees and the local middle class have been selling their existing homes and moving into innovation city apartments, which has provided a solid floor for prices. An LH official explained, "Not only public enterprise employees but also local residents are moving into innovation city apartments. There is a shortage of company housing compared to the number of headquarters staff, so employees are seeking rental homes, which is pushing up market prices."

After the Korea Aerospace Administration opened in Sacheon, a neighboring city of Jinju, on May 27 last year, the influx of related professionals has increased significantly. The continued attraction of aerospace-related companies and research facilities has boosted demand from high-income professionals, and more people are choosing Jinju as their place of residence due to its educational and living infrastructure. Since the opening of the agency, Jinju's housing prices have risen for 74 consecutive weeks, starting from the first week of June last year.

Kim Minkyu, head of the Jinju branch of the Korea Association of Realtors, said, "In Chungmugong-dong, where the innovation city is located, the market is so hot that there are no properties left to sell. There has definitely been an increase in aerospace industry professionals, such as those from Korea Aerospace Industries, moving to Jinju for their children's education." He added, "In western Gyeongnam, most areas are rural, so Jinju is virtually the only city with sufficient educational and living infrastructure. As the innovation city’s income levels rise and school districts improve, its popularity continues to grow."

A shortage of supply is also pushing up Jinju's housing prices. According to real estate platform Asil, the annual appropriate demand in Jinju is 1,683 households, but only 798 units are scheduled for occupancy this year, and just 166 units next year. As of September, there were only 68 unsold units, indicating that inventory has essentially been depleted. As of November 24, the number of properties for sale was 2,215, down 30.5% from a year ago. The completion of the KTX New Jinju Station development and expectations for the construction of the southern inland high-speed railway (Gimcheon to Geoje) have also increased the city’s residential appeal.

Crucially, recent policy changes have accelerated the timing of the new peak. Since the October 15 policy measures, Jinju has consistently recorded a high weekly growth rate of around 0.2% in all four subsequent statistics releases. There had been no weekly increases in the 0.2% range earlier this year, but this occurred twice: 0.22% in the fourth week of October and 0.21% in the third week of November. The strengthening of regulations in the Seoul metropolitan area following the October 15 measures appears to have shifted some demand to regional hub cities with fewer restrictions.

The "Jinju Innovation Jungheung S-Class The First," regarded as the leading apartment complex in the innovation city, saw its exclusive 113㎡ unit sell for 1.07 billion KRW on November 7. This was the first time an apartment in Jinju surpassed the 1 billion KRW mark, setting a new record. The actual transaction price jumped by about 250 million KRW in just one year.

Following Jinju, Changwon, the largest city in Gyeongsangnam-do, has also joined the upward trend, leading to a reversal in the province's apartment sales prices last month, marking the first monthly increase in 24 months. This has completed the simultaneous upward trend across the "Bu-Ul-Gyeong" region. Busan ended its "171-week downturn" and has now risen for four consecutive weeks, while Ulsan's cumulative increase this year is 1.17%, the highest among regional metropolitan cities. In recent weekly statistics, Busan and Ulsan each recorded their largest increases of the year, at 0.05% and 0.11%, respectively.

Park Wongap, Chief Real Estate Specialist at KB Kookmin Bank, said, "Regional cities have limited supply and fewer regulations, so prices respond quickly to policy changes. As demand in the Bu-Ul-Gyeong region begins to move again, the differences between regions may become even more pronounced." He added, "The trend of both external and local demand moving toward regional hub cities is likely to continue for the time being."