An aerial view of Yeongjong International City. [Herald DB]
An aerial view of Yeongjong International City. [Herald DB]

Apartment prices in Hwaseong's Dongtan district, Yongin's Giheung district and Guri in Gyeonggi Province have continued to climb sharply even after being designated as regulated zones and land transaction permit areas, while unsold apartments are piling up rapidly within Incheon. The contrast illustrates a widening temperature gap in the housing market even within the greater Seoul area, depending on location.

According to the Korea Real Estate Board on Thursday, unsold housing units in Incheon's Jung-gu — now reorganized into Yeongjong-gu and Jemulpo-gu — stood at 1,810 as of May, up 13 percent from 1,588 the previous month. The figure had been just 33 units as recently as December before suddenly jumping to 1,683 in January — a 51-fold increase — and has since hovered between 1,500 and 1,600 units before climbing above 1,800.

As a result, Incheon's Yeongjong-gu was added this month to the list of "unsold-unit management zones" designated monthly by the Korea Housing Finance Corp. The agency designates districts where unsold units number at least 1,000 and account for at least 2 percent of total apartment stock, and where at least one of the following conditions is met: rising unsold inventory, slow absorption of unsold units, or concern over future unsold units. Four zones were designated for July — Incheon Jung-gu, Gyeonggi Province's Icheon, Gyeonggi Province's Yangju and Busan's Sasang — and the market has taken note that three of the four are in the greater Seoul area.

The buildup of unsold units in Yeongjong reflects a supply glut from new apartment construction in recent years that demand has been unable to keep pace with. In the first half of this year, Dietro La Mer, a roughly 1,009-unit complex, was launched for pre-sale in Yeongjong International City but still has unsold units remaining. Two other projects — Yeongjong Haneul City Daerasu Awesome and Yeongjong Haneul City Sinil Biaf Crest, with 297 and 960 units respectively — also still have inventory left.

Pre-sale prices for these complexes were all in the 500 million to 600 million won ($397,000) range for the standard 84-square-meter exclusive use area — cheaper than comparable Seoul units — yet buyers have not materialized.

Yeonsu-gu, home to Songdo International City, has seen some price recovery recently, but the warmth has not spread to Yeongjong International City. The soon-to-open Third Cross-Harbor Bridge will connect directly to Cheongna International City and was expected to significantly cut travel times to Seoul's Yeouido and Mapo areas, but demand has yet to absorb the available supply.

"Contract cancellations and unreserved-unit sales have been continuing at new apartment complexes on Yeongjong Island," a pre-sale industry official said. "At some complexes, the possibility of transactions below the original pre-sale price — so-called negative premiums — is also being discussed."

In contrast, parts of southern Gyeonggi Province are seeing not only complete sell-outs but also pre-sale prices that keep rising.

An analysis of Korea Real Estate R114 data by real estate information firm Budongsan Info found that last year, the pre-sale price per 3.3 square meters in Gwacheon was 59.92 million won — the highest in Gyeonggi Province. Gwangmyeong followed at 43.08 million won, then Seongnam at 38.06 million won, Anyang at 33.37 million won and Guri at 28.68 million won.

"The real estate market has recently restructured around end-user demand, making jobs, cultural amenities and transportation networks more important than ever," an urban planning expert said. "Addressing the unsold-unit situation will require positive local catalysts."

Sale prices have also risen sharply. The government this month added Hwaseong's Dongtan district, Yongin's Giheung district and Guri to its list of regulated zones and land transaction permit areas, but apartment sale prices in those areas have continued to climb. In Seoul, prices in outer districts such as Seongbuk-gu and Jungnang-gu also rose, widening the overall pace of gains.

According to the Korea Real Estate Board's weekly apartment price survey for the first week of July — based on data as of Monday — Hwaseong's Dongtan district posted a week-on-week apartment price increase of 1.29 percent. That is slightly below the previous week's gain of 1.46 percent but still the highest rate of increase nationwide.

Yongin's Giheung district and Guri saw their gains accelerate. Giheung rose 0.56 percent, up from 0.39 percent the previous week, while Guri's increase more than doubled, from 0.3 percent to 0.64 percent.


hss@heraldcorp.com