In Sejong, where expectations for the transfer of the administrative capital continue to boost the housing market, demand for land investment has also surged.
According to the ownership transfer registration application data from the court's registration information plaza on the 27th, the number of land transactions in Sejong in April was 828 in total. This marks a 147.9% increase compared to 334 cases in the previous month, the highest transaction volume in a year and three months since January of last year.
Lee Jae-myung, the presidential candidate from the Democratic Party of Korea, presented 'completing the Sejong administrative capital' among his 10 policy pledges, promising to establish the National Assembly Sejong Hall and the President's office in Sejong during his term and to promote the transfer of public institutions in the second phase. Kim Moon-soo, the presidential candidate from the People Power Party, also vowed to promote regional balanced development as one of his top 10 policies, pledging a complete transfer of the National Assembly and the relocation of the President's second office.
As presidential candidates propose their pledges to move the presidential office and National Assembly to Sejong, there is an expectation of increased demand, which has already led to rising apartment transaction volumes and prices. According to the Korea Real Estate Board's weekly apartment price trend survey, Sejong recorded increases of 0.23%, 0.49%, 0.40%, 0.48%, and 0.30% over the past five weeks, achieving the highest rate of increase in the country.
In this situation, when merely comparing transaction volumes, the volume of land transactions exceeds that of apartment transactions. Last month, the number of collective building transactions in Sejong was 601.
In particular, it has been analyzed that the increase in land transactions is due to relatively lower taxes and thresholds for loans compared to apartment purchases. If a multi-homeowner purchases an additional apartment, the acquisition tax can be as high as 12%. Meanwhile, the acquisition tax for land is 4.6%, which is relatively low compared to buying an apartment, and there are no restrictions on the Loan-To-Value (LTV) ratio, allowing loans of up to 80%.
A representative from an A certified real estate office in Nasung-dong, Sejong City, noted, "Recently, most apartment transactions have already been completed, and there are no listings available. Instead, inquiries from outsiders looking for land transactions have increased," adding that, "Landowners, after a long period of stagnation, may be thinking now is a good time to sell."
Experts explained that with the transfer of administrative bodies, not only the demand for apartments is expected to rise, but also the demand for development has led to increased land investment. Professor Seo Jin-hyung from the Department of Real Estate and Legal Affairs at Kwangwoon University stated, "When the National Assembly and other bodies transfer, expectations for expanded development arise. There are hopes for the expansion of the urban perimeter."
Song Seung-hyun, CEO of Urban and Economy, stated, "To transfer public institutions, land is needed, so demand for land will increase," adding that, "As a result, the sentiment for land investment could strengthen."
However, experts advise that investing in Sejong's land based solely on the theory of relocation could be risky. Compared to purchasing apartments, land has lower liquidity and obtaining capital gains in a short period can be difficult.
Professor Seo stated, "If the transfer of public institutions proceeds on a smaller scale than expected, there are risks," and added, "If one is to invest, it is advisable to approach it after the realization of the pledges becomes concrete."
CEO Song also noted, "Since this is a policy matter, it could take longer than transferring private corporations," emphasizing that, "The uncertainty is more impactful than other conditions, and the possibility of a shift in power in the future cannot be ignored, necessitating caution when investing."