Jochiwon and Daejon, the Biggest Beneficiaries

A major change is predicted to occur again in the real estate market in the Chungcheong area, which had already underwent a significant change caused by the 2002 presidential election and the opening of the rapid transit railway in earlier this year, as the outline of the candidate city for an administrative capital has been drawn.

In particular, the candidate sites evaluation result, issued on Monday by the Committee on Administrative Capital Relocation, can be seen as confirmation of a candidate city. Experts say that there will be a contrasting impact of this report between the Chungnam Yeongi-Gongju region, which received the highest score, and the other cities to be left out.

Increase of Lands on Sale in Yeongi-Gongju Area—

There has been an atmosphere in the Yeongi-Gongju area, which scored the highest in the evaluation, since last month sensing that it will be chosen as the new capital.

Because of this prediction, many real estate properties in areas, where properties will be expropriated, were put on the market out of disappointment. Their trading prices are significantly lower than their declared values.

The president of Daesan realty office in Yeongi-gun, Lee Sei-yong, said on the phone on Monday, “Thirty percent of semi-farmlands around Nam-myon, Dong-myon, and Geumnam-myon areas in Yongi-gun which were included as candidate areas, have changed its ownership since the 2002 presidential election. The prices of some land in these areas, whose declared values are around 20,000 to 30,000 won, jumped to one million won.”

Now since a rumor pointed out a most promising candidate city, there are no more buyers and therefore, real estate trading has been almost halted in this area. Lee said, “On average, an agency has 20~30 properties on sale. But there are no buyers, except rare inquiries of those who are interested in receiving land in other areas in exchange for the expropriated properties.”

Currently, the average trading price in Yeongi-gun area is 100,000-300,000 won. However, their declared values are mostly lower than 50,000 won.

A real estate agent, who works for the Hanmaum Gongin, Yeongi-gun, predicted, “Since it is not yet clearly known exactly what areas will be included, there has not been a sharp decline in prices. Still, there is a possibility that the land prices in the relevant areas may drop under their declared values.”

Surrounding Areas Expecting to be Benefited as a “New Metropolitan Area”—

The surrounding areas’ real estate market is buoyant with the expectation that they may become a “new metropolitan area.” Most regulations will focus on the areas within a 10 kilometer radius from the candidate city. The surrounding areas still can be benefited from development of the new capital city.

Son Sang-jun, president of the Dowoo Development, a real estate development company, analyzed, “Areas in Daejon and Jochiwon are the best beneficiaries. These areas are expected to attract more base facilities and to have population growth, due to the development of the new capital.” The areas, known to have dropped out, will still receive significant benefits from the general development of Chungcheong region.

Kim Young-jin, president of the Naejipmaryon Jongbosa, a real estate information provider, predicted, “Street money will flow into the surrounding area of the new capital and other areas will remain steady. There will be no sharp drop in land prices since the Chungcheong region will have increased potential for development due to the relocation of the capital.”

Meanwhile, there are predictions saying that some inner areas in Chungbuk will face difficulty in enjoying enough benefits from this capital relocation.

Hwang Yong-cheon, president of the Hamilton Consulting, said, “Areas in some dropped-out candidate cities are located too far to be benefited from the new capital development and therefore, there is little possibility that they will attract buyers.”

Ki-Jeong Ko koh@donga.com