Although the national real estate market has been frozen due to the steep interest rate hike, ‘expedition investment’ from outsiders is still flocking to apartments in Seobuk-gu, Cheonan, Chungcheongnam-do and Wonju , Gangwon-do. Foreigners account for almost 40% of all apartment sales transactions. In addition to the strong background demand, the low initial financial burden due to the high jeonse price compared to the sale price is considered to be the factor that attracts people from outside the town.
○ 40% of transactions are foreigners… Unsold sales ‘discounted’
According to Asil, a big real estate data company on the 12th, the region with the biggest increase in apartment sales by foreigners between June and August was the northwestern area of Cheonan. Out of a total of 1253 transactions during this period, 491, or 39.1%, were analyzed as foreign transactions. Of these, 111 cases (22.6%) were purchased by Seoul residents. This means that 1 in 5 foreigners who bought an apartment in the northwest live in Seoul.
In Dongnam-gu, Cheonan, 33.2% (749 cases) of the total 749 flat sale transactions were made by outsiders during this period. An Asil official explained, “Both are the best regions where the number of foreign apartment sales has increased.”
As foreigners are actively buying apartments, the number of unsold units in Cheonan is also decreasing rapidly. In 2019 alone, the monthly unsold units totaled 1300-1500, but in 2020, it suddenly dropped to 300 households, and this year, it is maintained at around 120 households. Experts predicted that since the end of September, the south-east and north-west areas have been out of the control area and will enjoy the benefits of unregulated areas in the future.
Wonju is one of the regions where foreign trade has increased rapidly. During the last three months, 377 (31.2%) of a total of 1,208 flat sale transactions were from outsiders. Wonju has recorded zero unsold pre-sale units on a monthly basis since September last year. Wonju has always been an unregulated real estate area.
○ Behind the scenes demanding ‘firm’… ‘Betting’ on growth potential
Experts cited the strong corporate demand as the competitiveness of these regions compared to other small and medium-sized cities in other states. Cheonan 3rd Industrial Complex, Cheonan 4th General Industrial Complex, and Cheonan General Industrial Complex are concentrated in Cheonan Seobuk-gu. The Cheonan Techno Park general industrial complex and BIT northern general industrial complex are under construction with the goal of completion next year.
13 public organizations, including the Korea Tourism Organization, the National Health Insurance Corporation, and the National Park Service, are located in Wonju. In Wonju Enterprise City, which has a high-tech medical industrial complex and commercial, residential and public facilities, large companies such as Neo Biotech, an implant manufacturer, are set to move in. It is evaluated that the growth potential of the local economy is high together with a diverse demand for housing. As the demand is mainly met by employees of public institutions, large corporations, and partner companies, the pace of construction of infrastructure such as transport and commercial areas is fast. In addition, there is an analysis that foreign investors continue to invest in apartments with an advertised price of less than 100 million won to save tax because the price of jeonse is relatively high compared to the selling price. If the published price is less than 100 million won, you only have to pay the basic acquisition tax rate (1.1%) regardless of how many houses you own. In August this year, the price of Jeonse compared to the selling price of Seobuk-gu and Wonju was 80.2% and 76.3%, respectively.
Lee Eun-hyeong, a research fellow at the Korea Construction Policy Research Institute, said, “In areas where corporate job creation is possible, investment tends to flow in anticipation of trickle-down effects such as revitalizing the local economy and rising real estate values. in the medium to long term.”
By Kim Eun-jung, staff reporter kej@hankyung.com
