“Jeju real estate? It's all dead, you could say. It's been downhill for 10 years.” (A official from a real estate agency in Nohyeong-dong, Jeju City)
Despite being the spring peak season, there were few tourists in Nohyeong Intersection (Nohyeong Ogeori), which is close to Jeju Airport and considered active in terms of business. It was past 2 p.m. on the 13th, but the streets were not crowded, and there were no lines at restaurants or cafes.
The real estate industry in Jeju uniformly pointed to the prolonged economic downturn as the reason the Jeju market has sunk, noting that domestic tourist numbers have significantly decreased, coupled with the fact that residents are also cutting back on spending.
A, who runs a real estate agency in Nohyeong-dong, said, “Although the number of foreign tourists has dropped significantly, the domestic economy continues to struggle, causing locals to tighten their wallets. This makes it hard for Jeju small business owners to operate their shops.” A added, “The Jeju economy peaked between 2010 and 2016, but has been steadily declining since, along with real estate.”
A noted, “At least in Jeju, Nohyeong-dong can be classified as Gangnam in Seoul due to the number of new complexes it has, and the consumer base in the region is strong, so vacancy rates in commercial properties are not severe.” A also explained that “some areas in Nohyeong-dong still have a floor price for rights worth hundreds of millions won.”
He added, “Most business in the Yeondong area of Jeju is directed at tourists, yet vacancies continue to rise. You can easily feel it by walking down Yeondong Street; with the number of both foreign and domestic tourists down significantly, it is challenging to break even while running a business.”
It was around 3 p.m. when I arrived at Yeondong after walking from Nohyeong Ogeori for about ten minutes. Just outside of Nohyeong Ogeori, a vacancy sign marked “for rent” was right in front of me. The same situation was seen in the “Nuwe Village Street,” developed to create a car-free area for leisure and attractions in Jeju.
Even during the day, many restaurants, cafes, and clothing stores were noticeable as being closed. Occasionally seen foreign tourists were mainly in small groups of 2 to 3 people, making it almost impossible to spot any large groups.
According to the Bank of Korea Jeju office, the number of domestic tourists to Jeju in February of this year was recorded at 752,000. This is a decrease of 150,000 (16.8%) compared to February of last year. The total number of tourists who visited Jeju in March of this year was 939,000, a drop of 145,000. By nationality, domestic tourists decreased by approximately 139,000 while foreign tourists decreased by about 6,000.
B, who runs a café in Yeondong, said, “I moved to Jeju about ten years ago after quitting my job to start a business. Comparing sales from ten years ago to this year, they have decreased to an average of one-fourth.” However, B also noted, “Rental prices keep rising regardless of the sales drop, resulting in a significantly reduced profit margin.”
In fact, rental prices for small commercial properties near Jeju Airport are on the rise. According to the Korea Real Estate Board, rental prices for small commercial properties at Nohyeong Ogeori in Jeju remained around 17,000 won per square meter in 2016 before dropping to 15,000 won in 2017-2018.
After that, during the spread of COVID-19 in 2019, the price rose to 18,000 won, then to 18,300 won in 2020 and 18,500 won in 2021. Following a leap to 20,000 won in 2022, it rose to 20,150 won in the first quarter of this year.
C, a restaurant owner in Yeondong, also stated, “Overall, the sales in the Yeondong area of Jeju have been cut in half compared to ten years ago.” C added, “To make money in Jeju, you can either grow tangerines or run a business; without tourists and a sluggish domestic economy, there’s no way to survive.”
There were opinions expressing injustice regarding the tarnished image of Jeju due to recent incidents where some restaurants charged 'unfair prices.'
D, who operates a food and beverage store in Yeondong, stated, “The restaurants where customers were charged unfair prices are run by people from regions other than Jeju, not by locals.” D added, “There are many more conscientious stores offering good products at reasonable prices; I hope generalizations like ‘you get overcharged when you go to Jeju’ are avoided.”
Experts pointed to the increased options for domestic tourists and rising airfare and living costs as reasons for the deepening decline of the Jeju market.
Professor Koh Jun-seok of Yonsei University’s Sangnam Institute of Management noted, “Jeju tends to have relatively high airfare and logistics costs. Domestic tourists could change their travel destinations to places like Japan or Taiwan, where costs are lower, especially when they are not in a special context like COVID-19 clamping down on foreign travel.” He added, “These factors are causing the ongoing stagnation of the Jeju market.”
Professor Koh suggested, “If a new airport were built in Jeju and airfare were lowered, the recovery of the local economy could happen at a considerably faster pace.” He remarked, “For example, if domestic transport costs to Busan and Jeju are similar, there would be no reason to choose not to go to Jeju.”