Land Prices in Chungnam Up by 4.3 Times the National Average

As anticipation for the relocation of the capital builds, land prices in Chungcheongnam-do for the second quarter (April~June) have risen by 4.3 times the average increase rate.

As a result, the Ministry of Construction and Transportation has designated Gongju-si and Yeongi-gun, which has been all but confirmed as the site for the “new administrative capital,” and the adjacent Gyeryong-si as “over-speculation zones.”

According to the report “Land Market Trends 2nd Quarter 2004” released by the ministry on July 29, overall land prices have been relatively stable, with an average increase of 1.09 percent from the 1st quarter (January~March). The consumer price index (CPI) for the 2nd quarter has risen by 0.7 percent since the last.

However, the land price increase rate for the Chungnam area was tallied at 4.65 percent, which amounts to 4.3 times the national average of 1.09 percent and a staggering 6.6. times the CPI increase rate.

Other areas showing a marked rise in land prices during the 2nd quarter, on the “si (city)” and “do (province)” level, include: Gyeonggi-do (1.74 percent), Incheon (1.30 percent), Chungcheongbuk-do (1.13 percent), Gyeongsangnam-do (1.01 percent), Daejeon (0.97 percent), and Seoul (0.95 percent). On the other hand, Busan and Jeollanam-do each showed only a 0.18 percent increase during the same period, while Gwangju turned out to have the smallest margin of increase in land prices nationwide, at just 0.2 percent.

Among smaller cities and districts, the prospective capital, Yeongi-gun, took the cake with a whopping 9.59 percent increase from the 1st quarter. Among the top 10 cities and districts in terms of increase rate, all except Paju-si (no. 2, at 7.1 percent) in Gyeonggi-do are in the Chungcheongnam-do area (Dangjin-gun, Asan-si, Cheonan-si, Yesan-gun, Gongju-si, Hongseong-gun, Seosan-si, and Cheongyang-gun).

Meanwhile, the Ministry of Construction and Transportation has decided to elect Gongju-si, Yeongi-gun, and Gyeryong-si as “over-speculation zones” as of July 30, in order to prevent excessive real estate speculation around the prospective administrative capital.

Once the designation takes effect, buyers who have been allotted apartment units in the area will not be able to resell their home ownerships from the day of allotment till the registration of their property rights. Subscription qualifications will also be restricted.

Park Sang-woo, who heads the Housing Policy Division at the ministry, stated, “We will keep a close eye on land market trends, and name any areas within Chungnam and along the West Sea coast in danger of excessive speculation as additional over-speculation zones.”

Kwang-Hyun Kim kkh@donga.com