“Not Selling for Now”: 800 Trillion Investment Announcement Shakes Up Land and Home Prices [Report]

Land Prices Rising Near Songjeong Station

Sales Put on Hold in New Residential Districts

Stalled Redevelopment Zones Expected to Gain Momentum

On July 8, at Gwangju Airport in Gwangsan-gu, Gwangju, which this reporter visited, a drive of about eight minutes from KTX Gwangju Songjeong Station led to vast stretches of rice paddies and greenhouses along the airport site. Orchards and lush fields stretched beyond the horizon around the airport building, making the scale of the 8.2 million square meters of land palpable. Although the site is only about 5 kilometers from the old city center, it has remained sparsely populated farmland, but now an 800 trillion won semiconductor cluster is set to be established here.

On the 8th, farmland stretches around the Gwangju Airport building in Sinchon-dong, Gwangsan-gu, Gwangju. Photo by Lee Ji-eun

With the government designating the Gwangju military airport as the site for the Samsung Electronics and SK hynix semiconductor cluster, the local real estate market has begun to heat up. Anticipation that the cluster will bring jobs and attract population inflow is already reflected in the overall real estate market, including land near commercial districts, redevelopment zones, and the apartment sales market.

On the 8th, barbed wire and no-entry warning signs were attached to the fence surrounding the military airport site in Sinchon-dong, Gwangsan-gu, Gwangju. Photo by Lee Ji-eun

Songjeong Station Area, Once Suffering from Commercial Slump... Land Prices Are Rising

The selection of the semiconductor cluster site has started to push up land prices around Gwangju Songjeong Station. This area had been struggling due to a stagnant commercial district, but the price of nearby land, which was around 15 million won per pyeong, has recently risen to 20 million won. The area is home to a commercial district that formed along a traditional market over 100 years old. Due to the impact of the military airport, the area has been restricted by height limits, preventing the construction of high-rise residential buildings, and as a result, most nearby apartments and villas are under 15 stories.

The street of 1913 Market in Songjeong-dong, Gwangsan District, Gwangju is quiet on the 8th. Photo by Lee Ji-eun

Yoon Byungha, a certified real estate agent at Kumho Yoon Real Estate near Gwangju Songjeong Station, said, "With the development of the multi-modal transfer center near Songjeong Station and now the positive impact of the cluster project, landowners are raising their prices. If a semiconductor factory is established, it is expected that the area around Songjeong Station will attract significant foot traffic and that the commercial district will be revitalized."

Contract Holds in Suwan District... Redevelopment Projects Expected to Gain Momentum

Warmth is spreading even to the apartment sales market, especially in new residential districts. It is expected that investment demand will be focused not on Sinchon-dong, Dosan-dong, and Usan-dong, which are adjacent to the military airport, but on Suwan and Seonun districts, which have new apartments, good school districts, and commercial infrastructure. Suwan and Seonun districts are about 7 km and 4 km from the military airport, respectively, both accessible within 20 minutes by car, making them popular among newlyweds and young buyers. It is expected that the residential area supporting the semiconductor cluster will form in these new residential districts near the airport site rather than in the older downtown area, which mainly consists of older apartment complexes.

At Hoban Verdium 1st Complex in Suwan District, which recorded the highest transaction price for an 84㎡ unit, there was a case where the seller put the contract on hold due to expectations of development benefits. The most recent transaction for this apartment was 620 million won, and the seller appears to be waiting to see how prices will move in the future. A local real estate agency head, identified as Mr. A, said, "After the news broke that the military airport site was selected, a homeowner contacted us to put the contract on hold, not knowing how the market would move. While there has not yet been a move to raise asking prices, many expect that if Gwangju attracts more people, investment demand will focus on Bongseon-dong, a traditional wealthy neighborhood, Suwan District, which is good for raising children and has no nightlife facilities, and Seonun District, where rent is affordable."

On the 8th, Geunbyeol Elementary School and a newly built apartment complex are located in Suwan District, Gwangsan-gu, Gwangju. Photo by Lee Ji-eun

There are also expectations that redevelopment projects that had stalled will gain momentum thanks to the establishment of the semiconductor cluster. The Shinga-dong Redevelopment and Maintenance Project in Suwan District is a representative example. This site was designated as a maintenance zone in 2011, and both relocation and demolition have been completed, with plans for a large complex of 4,732 households. However, the project has been left idle as the construction contract was terminated due to issues over construction costs and sale prices. Now, as most apartment complexes in Suwan District are over 10 years old and there is little land available for new construction outside the Shinga-dong redevelopment zone, expectations are rising that the project will pick up speed again.

A nearby real estate official said, "There have been several failed attempts to select a contractor due to issues with construction costs and business feasibility, but if large-scale investment demand flows in due to the cluster, contractors may show renewed interest in bidding."

On the 8th, the Shingadong Redevelopment Area in Suwan District, Gwangsan-gu, Gwangju, was left abandoned, surrounded by fences. Photo by Lee Jieun

With real estate prices rising, the government is considering whether to designate the area as a land transaction permission zone. The market is paying close attention to which areas might be included in the regulatory zone. Previously, when Namsa-eup and Idong-eup in Cheoin-gu, Yongin City, were designated as candidate sites for the Yongin Advanced System Semiconductor Cluster in 2023, the Ministry of Land, Infrastructure and Transport designated 129.48 square kilometers in the area and its surroundings as a land transaction permission zone. Ham Youngjin, head of the Real Estate Research Lab at Woori Bank's WM Business Strategy Department, said, "Although the specific scope of regulation has not yet been determined, if development pressure extends to commercial areas near the military airport site, those areas could also be classified as land transaction permission zones. If that happens, investment funds could be tied up for a long time, so cautious investment is necessary."

This content was produced with the assistance of AI translation services.