Regional New-Build Supply Hits 14-Year Low ... New Apartments in Old Downtowns Become Highly Sought After

[Financial News] As the supply drought in regional housing markets worsens amid high interest rates and rising construction costs, newly built apartments in old downtowns—which have gone without new presales for a long time—are drawing attention for their scarcity.
According to Real Estate R114 on the 21st, the total supply of apartments outside the Seoul metropolitan area this year, including planned units but excluding rentals, was tallied at 88,942. This is the lowest figure in 14 years, since 2012 (65,412 units), and about 29.63% lower than last year’s 126,391 units. The contraction in supply is especially pronounced compared with the steady annual average of 150,000 units over the past decade.
Supply has fallen sharply in major regional markets, particularly Gangwon (-57.01%), Ulsan (-59.89%), Busan (-54.55%), North Chungcheong (-51.85%) and North Jeolla (-32.83%). As new supply has plunged, pent-up demand is concentrating on new apartments in old downtowns, where residents can benefit from established urban infrastructure.
Both the apartment subscription and resale markets are hot. Forena Hillstate Jinju, launched last August in Ihyeon-dong, Jinju, South Gyeongsang Province, recorded a high average first-priority subscription competition ratio of 21.15 to 1, buoyed by being the area’s first new-apartment supply in 21 years. Meanwhile, an 84-square-meter unit at Chuncheon Lotte Castle Winner Class in Yaksadong, Chuncheon, Gangwon Province, where new supply has been extremely rare over the past decade, sold for 652.5 million won this March. Prices have risen sharply, climbing by around 40 million won in just two months.
An industry official said, “Old downtowns in regional cities already have solid everyday infrastructure, including schools and commercial facilities, making them highly desirable places to live,” and forecast, “With plenty of pent-up demand from buyers waiting to move into new homes, interest will continue to focus on new developments that combine a good location with quality.”
Amid this trend, construction companies are drawing attention with a succession of new presales this fall in prime locations in regional old downtowns. Dongbu Construction plans to launch sales in October for Namchuncheon Centerville, a 264-unit development with homes ranging from 59 to 84 square meters, in Hyoja-dong, Chuncheon, Gangwon Province. The new apartment complex is the first to be supplied in a while in the old downtown area of the highly sought-after Yaksaji District. It is close to the Gyeongchun Line, ITX Namchuncheon Station and the bus terminal, and will feature Cloud9, an uppermost-floor sky community with a sky fitness center and guesthouse—a first for Chuncheon.
IPARK Hyundai Development Company is selling Cheongju Gagyeong IPARK Complexes 7 and 8 in Gagyeong-dong, Heungdeok-gu, Cheongju, North Chungcheong Province. The development comprises 1,671 units with exclusive areas of 84 to 116 square meters. It is the final phase of sales completing a large branded town of about 6,300 units, including the existing complexes 1 through 6, and offers convenient commutes to Gagyeong-dong’s central commercial district and nearby business districts.
Hyundai Engineering is selling Hillstate Geoje Signature in Okpo-dong, Geoje, South Gyeongsang Province. The development comprises 1,963 units with exclusive areas of 84 to 165 square meters, of which 356 units will be supplied first in Phase 1. Located close to the Hanwha Ocean Geoje Shipyard, the complex offers convenient access between home and work. The future opening of the Southern Inland Railway is also expected to further improve the wider transportation network.
Hoban Construction plans to launch sales in November for Hoban Summit Choryang, a 432-unit development being built through the Choryang 3 District Housing Redevelopment Project in Choryang 3-dong, Dong-gu, Busan. It is close to Choryang Station on Busan Metro Line 1 and KTX Busan Station, and is considered a prime old-downtown location that can benefit from both Choryang Traditional Market and the North Port redevelopment project.

[email protected] Jeon Min-kyung Reporter