[Viewpoint] Local Sentiment: "Improving Settlement Conditions Is the Top Priority"

To what extent can the so-called “just supply more” solution for stabilizing the housing market be effective based on region? In Seoul, the shortage of housing supply has led to debates between the government and local authorities over whether even Yongsan Park should be used as a residential site. However, in Cheonan, Chungcheongnam-do, which is only an hour’s drive away, the situation is drastically different. Here, an oversupply of housing has resulted in a growing headache of unsold properties. Cheonan is less than 90 kilometers from Yongsan in Seoul. Recently, Korea Housing and Urban Guarantee Corporation newly designated this area as an unsold housing management region.

The Cheonan area, together with neighboring Asan, is home to nearly 1 million people, yet as of the end of July, more than 5,000 homes remained unsold. When including Asan, the number exceeds 7,200 units. Considering that unsold homes in Seoul—a city with a population of 10 million—number 994, and even in Busan with a population of over 3 million there are about 8,300 unsold units, the level of unsold housing in major regional cities is serious. The issue of housing shortage seems to be a story for another country altogether.

Even within Gyeonggi Province, which is close to Seoul, differences in supply can be observed. While house prices are rising in places like Dongtan, Hwaseong and Yongin, Icheon recently barely escaped being designated as an unsold housing management area, and Pyeongtaek—with its Samsung semiconductor campus—has been struggling to absorb a surplus of apartments.

Unsold homes have a severe impact on the local economy. As people move out and jobs decrease, property values fall, which in turn leads to further out-migration—creating a vicious cycle. In particular, unsold properties after completion can even trigger slumification. For these reasons, such regions are putting a great deal of focus on establishing “settlement conditions” that encourage stable residency. Strengthening infrastructure like schools and hospitals, attracting businesses to create jobs, expanding the incoming population, and reducing vacant properties have become top priorities.

This divide in real estate sentiment—'expanding supply vs. preventing unsold homes'—is also evident in the National Assembly’s Land, Infrastructure, and Transport Committee, which handles related legislation. Of the 30 lawmakers in the committee, there are 8 whose constituencies fall under regulated land transaction zones. Of these, about 5 represent regions where housing supply issues in the Seoul metropolitan area are a major concern. For lawmakers whose constituencies are local districts, the housing supply issue on the committee may feel remote. Yoo Eui-dong, chairperson of the National Assembly’s Land, Infrastructure, and Transport Committee and representative for Pyeongtaek, responded to a question about the top issue of metropolitan housing supply by stating, “People in my region are more interested in improvements to settlement conditions.”

Given these diverging interests even within standing committees of the National Assembly, conflicts between the government and local governments over issues such as the relaxation of Seoul’s reconstruction regulations or the lifting of green belt restrictions are, by nature, local in scope. In other words, it is very difficult for such policies to find nationwide support.

There was a time in the mid-2000s when apartments in regional areas drew significant attention. As industries like steel, chemicals, and shipbuilding prospered and regional balanced development initiatives such as Sejong City produced results, housing prices in metropolitan cities began to gain momentum. It is difficult to recreate Seoul’s excellent residential environment in provincial areas in a short period of time. However, to alleviate the pressure on housing supply in Seoul, regional areas also need policies and conditions that can attract people. By creating environments where people can settle, it is possible to address chronic real estate issues in some parts of the metropolitan area.

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