Whole Nation Is Now Target of Speculative Real Estate Buying

As large-scale government development plans are becoming abundant, all the potential destination areas have become objects of speculative real estate buying. The projects announced so far includes development of cities for enterprises or with futuristic themes, development of the new administrative capital, and the transfer of public institutions to local areas.

Wonju in Gangwon Province, Haenam in South Jeolla Province, and Goonsan (Saeman-geum) in North Jeolla Province have seen their land prices jump two or three times in last few months, and more areas nationwide are following them.

Yesterday, according to related central and local government offices including the Ministry of Construction and Transportation and the Ministry of Finance and Economy, a string of various development projects in local areas excluding the capital area were announced under the aegis of promoting the balanced development of nation.

The Ministry of Construction and Transportation proposed a special law on Tuesday to build a “city for enterprise” that will be designed for business enterprises.

The ministry is also planning to relocate 180-200 public offices to 11 local areas, excluding the capital area and South Choongcheong province, and develop these areas into “futuristic innovative cities,” with 20,000 or more population in each city.

In addition, the Ministry of Finance is developing “Regional Special Zones.” So far, it has proposed 448 special zones reserved in 234 local areas and is planning to designate more than 10 special zones by the end of this year.

The Ministry of Culture and Tourism and the Uri Party have also announced last month their plan to develop “leisure and tourism complexes” as a measure to improve the travel deficit.

Although these development plans have not yet been confirmed, prices of the lands mentioned for the developments have rose without a ceiling, and out-of-towners are rushing to buy land in these areas.

In the case of Wonju, rumored to be one of the probable candidates for one of the proposed enterprise or futuristic cities, land prices in the area of Nadeulmok, Namwonju recently rose to 200,000 won per pyong, up from 7,000 won last year.

Roadside farming fields in Sani-myon in Hanam-gun that the South Jeolla Province government may develop into a tourism leisure complex have seen their price jump from 50,000 won per pyong in June to 100,00-150,000 won in August. That is a two or three times increase in prices within two months.

Land prices in some islands in front of the Saeman-geum in Goonsan, another area to be developed into a leisure complex, rose higher than one million won per pyong, and there is no land in this area left on the market: it has all already been sold to out-of-towners.

Lee Jang-choon, head of the Tourism School in Kyonggi University, pointed out, “The tourism complexes currently under development are far behind compared to existing ones such as Jeju Island and the Incheon Free Economic Zone. Such unrealistic development plans are typical desk plans and may only encourage speculative buying of lands in these target areas and end as a failure.”