Recently, the impact of loan regulations and the deteriorating domestic political situation, such as the impeachment crisis, have led to a decrease in real estate transactions, continuing the slump in the real estate market. Notably, the decline is pronounced in areas like Gwangju, Paju, and Pyeongtaek, where a significant number of new apartments were supplied this year.
According to the Korea Real Estate Board, as of the 16th, apartment sale prices in Pyeongtaek fell by 0.4% compared to the previous week. This marks a continuous decline for 20 weeks since the first week of August. In Gwangju, apartment sale prices switched to a decline of 0.07% in the second week of November and have fallen for four consecutive weeks. Subsequently, there was a rebound in the second week of December with an increase of 0.09%, but on the 16th, it again showed a significant drop of 0.06%. Additionally, Paju has experienced a decline for five consecutive weeks since the third week of November, recording a drop of 0.01%.
These areas are analyzed to be experiencing a larger drop in housing prices due to the abundance of new apartment supplies this year, coinciding with the recent stagnation in the metropolitan area apartment sales market. According to real estate research firm Real2Day, Paju’s new supply this year totaled 12,236 units, the highest among the 31 cities and counties in Gyeonggi Province. Gwangju (1,951 units) and Paju (1,785 units) ranked 10th and 11th, respectively, with both areas concentrating their supplies in the second half of the year.
An official at an A real estate agency in Hapjeong-dong, Pyeongtaek, said, “In recent years, land development projects have been actively carried out in Pyeongtaek. This year, there were many move-in units, but there has been a significant number of unsold units.” They added, “Given the loan regulations, there have been no inquiries for transactions, and as unsold apartments increase, listings are rising at lower prices compared to the market price.”
An official at a B real estate agency in Yadang-dong, Paju, noted, “The Woonjeong New Town had relatively good sales performance, but since the loan regulations, the transaction volume has drastically decreased and inquiries have reduced, leading to a drop in actual transaction prices.” They further stated, “Most traffic improvements, such as the metropolitan express railway (GTX), have already been reflected, and with the news that Seoul is also experiencing stagnation, one can only imagine how it is here.”
Recently, newly launched complexes have also received poor performance reports. The Gwangju 'Gonjiam Station Central I-Park' received only 137 applications for 319 units on the 17th of this month, resulting in undersupply for some types. The Paju 'Munsan Station 3rd Dongmun The East Central' recorded 125 applications for 706 units on the 19th of last month, leading to undersupply for most types.
Experts predict that these areas are scheduled for new supplies next year and that the real estate slump is expected to persist long-term, resulting in prolonged declines. Go Jun-seok, a professor at Yonsei University's Sangnam Business School, noted, “Pyeongtaek has a high supply compared to demand, and with Samsung Electronics recently struggling and facing factory shutdowns, they have been in a tough position.” He added, “Gwangju and Paju are bedroom communities and, given that time is needed to establish transportation infrastructure such as the GTX, there is little room for recovery, and the slump is expected to continue until next year.”
Seo Jin-hyung, a professor of real estate law at Kwangwoon University, said, “The burden from the recently risen prices, combined with loan regulations and domestic political instability, has dampened buying sentiment in suburban areas.” He further commented, “Additionally, the burden from the new supply is also acting on the market, leading to expectations of continued stagnation until the first half of next year.”