This month, 'Gwanggyo Jayeon & Hillstate' (exclusive area 84.39㎡) in Iui-dong, Suwon, was transacted at the mid-1.4 billion won range. It is one of the representative apartments in 'Gwanggyo New Town,' where the selling price in the second half of 2021 approached 1.6 billion won, but the recent transaction price has fallen lower than four years ago.
Similar phenomena are occurring in major new towns such as Dongtan and Wirye. The preference for “one solid property” among asset holders is strengthening, and with loan regulations and interest rate hikes, apartment prices in new towns in the metropolitan area have been stagnant for a long time. In key areas of Seoul, in some places, apartment prices have risen by more than 70% during this period. While Seoul's housing prices are showing signs of overheating, in new towns, demand is decreasing, leading to a phenomenon of market alienation.
According to the Ministry of Land, Infrastructure and Transport on the 19th, on the 7th, 'Gwanggyo Jayeon & Hillstate' (exclusive area 84.39㎡, 3rd floor) was sold for 1.44 billion won. The same area was transacted at 1.47 billion won (19th floor) on May 5, 2021, and 1.505 billion won (6th floor) on May 28, 2021. In November 2021, 84.68㎡ was transacted at 1.59 billion won, nearing 1.6 billion won. The change of hands occurred at a price up to 150 million won lower than four years ago. Gwanggyo Jayeon & Hillstate, located at 65, Docheong-ro, Yeongtong-gu, Suwon, Gyeonggi Province, is one of the representative apartments of Gwanggyo New Town, with 18 buildings, two basement floors, and 35 above-ground floors, totaling 1,764 households. It was developed by the Gyeonggi Urban Innovation Corporation (GH) and jointly constructed by Hyundai E&C, Kyeryong Construction, TAEYOUNG E&C, and Shindongah Construction.
'Dongtan Shilvertown Village World Meridian Bandou Ubora' (exclusive area 84.68㎡) in Bansong-dong, Hwaseong, Gyeonggi Province, also changed ownership on the 25th last month for 840 million won. This is more than 50 million won lower than the sale price of 895 million won in May 2021. It is one of the key apartments in Dongtan New Town, a large complex with 1,473 units. 'Wirye Lotte Castle' (exclusive 75.48㎡) in Hakamdong, Hanam, Gyeonggi Province, was transacted for 1.215 billion won on the 19th last month. This is more than 100 million won lower compared to the sale price of 1.32 billion won on May 5, 2021.
While apartment prices in new towns in the metropolitan area are experiencing stagnation, apartments in major locations in Seoul have surged during the same period. 'Lecents' in Jamsil-dong, Songpa-gu, was transacted for 2.3 billion won (exclusive 84.99㎡) on May 29, 2021, but changed hands for 3.03 billion won on the 12th, surpassing 3 billion won. The increase rate over four years is 31.7%. 'Tridgeum' (exclusive 84.83㎡), which was sold for 2.245 billion won on May 3, 2021, was transacted for 2.65 billion won on May 2 this year, with the sale price increasing by 405 million won (20.2%). 'Shinhyundai 11th Complex' (exclusive 115.23㎡) in Apgujeong-dong, Gangnam-gu, was transacted for 3.5 billion won on Apr. 24, 2021, and was sold for 6.2 billion won on the 10th last month. The price rose by 2.7 billion won (77.1%) in four years.
Yang Ji-young, chief of the asset management consulting department at Shinhan Investment Corp, said, “The real estate market overheated due to ultra-low interest rates, abundant liquidity, and a supply shortage in early 2021, causing housing prices in new towns, including Gwanggyo New Town, to rise significantly, but demand has greatly weakened since 2022 due to the rise in base interest rates, increasing loan interest burdens, and the strengthening of DSR loan regulations, impacting prices.” Yang added, “Not only in Gwanggyo, but also in other metropolitan new towns like Pangyo, Wirye, and Dongtan, price adjustments are being made compared to the peak in 2021,” and “interest rate hikes and increased supply are acting as complex factors.”
Jo Young-gwang, a researcher at Daewoo E&C, noted, “As the centralization phenomenon in Seoul becomes more pronounced, the alienation phenomenon in new towns around the metropolitan area is becoming increasingly serious,” adding, “There are almost no special factors such as the additional opening of a metropolitan railway to drive the real estate market in new towns.”