After the Oct. 15 real estate measures were announced, home prices in the provinces, which had been undergoing price adjustments, have inched up. Apartment sale prices have not surged as they did in non-regulated areas of Gyeonggi Province showing a "balloon effect," but areas with a pronounced upward trend are being detected. Ulsan's real estate market is also gaining momentum on the back of a boom in shipbuilding. In some areas such as Sejong, a rise in jeonse prices is being observed. Some analysts say these are precursors to increases in sale prices.
According to the Korea Real Estate Board (KREB) on the 23rd, apartment sale prices in the provinces rose 0.02% in the third week of November. It is the first time in about two years, since November 2023, that provincial home prices, which had fallen with negative change rates through September, have turned upward.
Among the five major metropolitan cities—Busan, Daegu, Daejeon, Gwangju and Ulsan—Ulsan has the highest rate of increase. Buying sentiment has revived thanks to the recent boom in the shipbuilding and auto industries. An 84-square-meter unit at Ulsan Daehyeon The Sharp Phase 2 in Yaum-dong, Nam District, Ulsan, set a record high last month with a transaction at 850 million won. A 92-square-meter unit at Munsuro I'Park in Sinjeong-dong, Nam District, Ulsan, posted a record at 870 million won last month.
Home prices are also rising in Jeonju, North Jeolla. Last week, the apartment sale price growth rate in Jeonju, North Jeolla, was 0.26%, surpassing Seoul (0.20%). New housing supply has plunged in recent years, but demand for new-build apartments remains high, pushing up prices. Even in 2022, Jeonju City had more than 2,000 move-ins, but that number plunged to 1,369 in 2023, 245 last year, and 277 this year.
Large new-build apartment complexes in Jeonju are setting record highs. An 84-square-meter unit at Forena Jeonju Eco City in Deokjin District, Jeonju City, recorded a new high with a transaction at 759 million won in early this month. A 120-square-meter pre-sale right for Seosin The Sharp Vivaldi, slated for occupancy next year, also changed hands at 929 million won, up by nearly 200 million won in about a year.
Jeonse prices are also on the rise. Last week, provincial apartment jeonse prices climbed 0.04%. In particular, jeonse prices for apartments in Sejong are jumping. The growth rate, which was 0.49% two weeks ago, fell to 0.37% last week, but it remains high compared with the provincial average. Two weeks ago, it ranked No. 1 nationwide in jeonse price growth.
There is an outlook that this trend will push up home prices for the time being. Pak Hapsu, an adjunct professor at Konkuk University's Graduate School of Real Estate, said, "There are regional differences, but jeonse prices are trending upward, so we expect provincial home prices to rise slightly through this year." However, whether it will persist long term is unclear. Nam Hyeok-u at Woori Bank's Real Estate Research Institute said, "It is true that the provincial real estate market is stirring, but it is difficult for it to continue for a long time," adding, "Bold tax benefits from the government, such as heavier acquisition tax relief and capital gains tax exemptions, are needed for investment demand to flow into the provincial real estate market. With end-user demand alone, it is difficult to sustain momentum."