Will There Be a Sharp Jump in Apartment Prices Starting With Pangyo?

The government has decided to set measures in the near future preventing the sale prices of Pangyo apartments from skyrocketing in order to block house prices from jumping consecutively.

According to real estate information provider Neonet (www.neonet.co.kr) and real estate agencies in Bundang-gu, Sungnam, and Shinbong, Seongbok, and Jukjeon areas in Yongin, the highest sales price for a 40-60 pyong apartment unit increased by up to 70 million won coming into February.

The price for a 59-pyong Areum Geonyeong apartment unit in Imae-dong, Sungnam, the nearest in Bundang to Pangyo, is set at 600-710 million won, rising by more than 50 million won, and a 69-pyong unit is approximately in the 800 million won range, rising by some 70 million won.

A 51-pyong unit in LG Sixth Village in the Seongbok area, south of Pangyo, which was sold for 430 million won at the end of January, was recently being sold at 500 million won, and a 49-pyong POS Home Town unit in the Jukjeon area rose by 40 million won in just a week.

Jeong Yeon-suk, the general manager at RBank’s Seongbok-dong, Yongin office, said, “As words that middle- and large-sized Pangyo apartments will be sold for 20 million won per pyong have been spreading, the middle and large-sized apartments for sale in the Seongbok area have disappeared in just a week.”

The recent jump in prices for apartments in neighboring Pangyo is from the anticipation that with the excessive competition between construction firms to receive Pangyo land, the land price will increase and the sale prices of Pangyo apartments will increase, so that the previous surrounding apartments will also increase.

Ahn Myeong-suk, manager of the real estate team at Uri Bank, said, “If this atmosphere continues, it may cause a domino effect in the sale prices of surrounding small and middle-sized apartments, sending them upwards. The policy must be supplemented, such as setting a ceiling to the bond bidding amount.”

Seo Jong-dae, director of the housing bureau at the Construction and Transportation Ministry, replied, “The expectations that middle- and large-sized apartment units in Pangyo will be sold at more than 20 million won per pyong are groundless. The sale prices will not be higher than the prices of surrounding areas.”

He also stressed, “Every institutional system will be mobilized to prevent the sale price from absurdly increasing the bidding on bonds for Pangyo apartments. They will be specially controlled so that the prices do not pass over 15 million won per pyong.”

In-Jik Cho cij1999@donga.com libra@donga.com