In the provincial apartment market, a selective uptrend is emerging around advanced industry hubs. While apartment prices across the provinces have risen only 0.17% so far this year, Jinju in South Gyeongsang, a residential base behind the Korea AeroSpace Administration, climbed 6.19%, and Seongsan District in Changwon, where nuclear power and defense corporations are clustered, rose 5.50%. Heungdeok District in Cheongju, North Chungcheong, home to a semiconductor production base, and Ulsan, where the shipbuilding and automotive industries are rebounding, also far outpaced the provincial average. As housing demand concentrates in areas where industrial jobs and supply shortages overlap, Daegu, Gwangju, and Jeju continue to decline, widening regional disparities.
An analysis of the weekly apartment price trend data from the Korea Real Estate Board (REB) on the 12th showed that, as of July 6, the first week of July, apartment sale prices in the provinces were up 0.17% from the end of last year. Over the same period, Seoul rose 5.42% and Gyeonggi climbed 3.10%. The overall provincial increase is lower than the greater Seoul area, but a clear uptrend has appeared in some regions with industrial bases and living infrastructure.
Apartment prices in Heungdeok District, Cheongju, where the SK hynix Cheongju campus is located, have risen 3.57% so far this year. That sharply outpaces the overall North Chungcheong increase of 0.76%. It is seen as a result of job-housing proximity demand near semiconductor production facilities and a preference for newly built apartments around the Cheongju Technopolis.
The most pronounced increase is in Jinju, South Gyeongsang. Jinju apartment prices have risen 6.19% so far this year, surpassing the increase in Seoul. After the Korea AeroSpace Administration was established in nearby Sacheon, residential demand flowed into Jinju, which is relatively better equipped with education, medical, and commercial facilities, according to analyses. Public institution employees in Jinju Innovation City and end-user demand are also supporting prices.
In Chungmu-dong, the 99㎡ exclusive unit at "Jinju Innovation City Jungheung S-Class The First" changed hands at a little over the low 700 million won range early last year, but last month it transacted at 950 million won. The 113㎡ exclusive unit also set a new record high with a transaction at 1.22 billion won in March.
A lack of supply is also cited as a price driver. According to industry tallies, Jinju has only 166 apartment move-ins this year. With few unsold units, demand is concentrating on existing apartments in preferred areas. Park Hap-su, adjunct professor at Konkuk University's Graduate School of Real Estate, said, "After the 2022 real estate project financing (PF) insolvency incident, new presale business sites have plummeted even in the provinces," adding, "Jinju is one of the representative regions where recent supply shortages are becoming evident."
The real estate market in Changwon, where nuclear power, defense, and automotive industries are concentrated, is also showing signs of recovery. Apartment prices in Seongsan District, Changwon, have risen 5.50% so far this year. Seongsan District is home to large corporations and production facilities such as Doosan Enerbility and the Hyundai WIA headquarters, as well as the LG Electronics Smart Park.
As power demand increases with the expansion of AI data centers, expectations have grown for Doosan Enerbility's nuclear and gas turbine businesses, and the employment base in the defense and auto parts industries is also supporting demand for dwellings, according to analyses. An official at a construction company said, "Even in Changwon, demand continues to flow into Seongsan District, which offers good job-housing proximity and living infrastructure."
Ulsan, where shipbuilding and automotive industries are the mainstays, has also seen apartment prices rise 2.84% so far this year. In Sinjeong-dong, Nam District, the 84㎡ exclusive unit at "Munsuro Grand Park Eileen's Yard" set a new record high with a transaction at 1.25 billion won in May. Compared with deals in the mid-900 million won range last year, that is an increase of about 300 million won in a little over a year.
However, opinions are divided on whether the uptrend that began in advanced industry hubs will spread across the provinces. Apartment prices in Gwangju and Jeju have fallen 1.58% and 1.07%, respectively, so far this year, and Daegu is down 0.75%.
Nam Hyuk-woo of Woori Bank's Real Estate Research Institute said, "For provincial home prices to rise in a sustained trend, investment demand needs to flow in as well as end-user demand," adding, "With heavier acquisition taxes on multiple-home owners still in place and limited second-home tax benefits, it will not be easy for buying momentum to spread across the entire provincial market."