“It’s already difficult for current public servants to find housing, so where are we supposed to accommodate an additional 10,000 people?”
A real estate agent in Sejong City’s Dodam-dong expressed this concern on October 15 regarding the government’s plan to relocate 44 central administrative agencies from the Seoul metropolitan area. Having operated a brokerage in the area for 14 years, he identified the lack of rental properties as the biggest issue facing the local housing market.
With the government announcing the relocation of nearly 9,929 civil service positions to Sejong, worries are mounting about whether the local housing market can handle the influx of new residents. Current public servants are already struggling to find rental housing, and those considering purchasing homes are hesitant due to the burden of loans.
Dodam-dong, located near the Government Sejong Complex, is a preferred residential area for civil servants, with some apartment complexes just a 10-minute walk from the complex. Families relocating with public servants typically seek apartment leases, while those moving alone often look for studios or officetels. However, the extension of existing tenants' contracts makes it challenging to find new rental listings.
One real estate agent noted, “As existing tenants continue to renew their leases, finding studios or officetels has become extremely difficult. While landlords are not significantly raising sale prices, some are listing properties that were previously priced at 300 million won for 350 million won.”
According to the Korea Real Estate Agency, as of the second week of October, Sejong’s apartment rental prices have risen by 4.71% compared to the end of last year. In contrast, sale prices have decreased by 0.92% during the same period, indicating a divergence in the rental and sales markets.
Due to the shortage of rental properties, some tenants are considering purchasing apartments, but loan regulations pose a significant obstacle. As deposit amounts rise, potential buyers find it difficult to secure financing, making actual transactions challenging. Another real estate agent remarked, “Some people are trying to buy homes out of desperation because they can’t find rentals, but insufficient loan availability leaves them stuck in limbo.”
Since the announcement of the agency relocations, inquiries from outside investors have increased. However, the current financial conditions differ from the rapid price increases seen in 2020, when expectations of relocating the administrative capital led to a surge in housing prices.
In 2020, Sejong’s apartment sale prices rose by 44.93% over the year. For instance, the highest monthly transaction price for a 99-square-meter unit in the Hallim Pool Ever complex in Dodam-dong jumped from 750 million won in January 2020 to 1.3 billion won in January 2021, an increase of 550 million won in just one year.
One real estate agent stated, “In 2020, we experienced a market where prices increased by 150 million won every two weeks, but back then, loans were more accessible than they are now. The current market atmosphere will depend on how many cash buyers are willing to enter.”
Experts emphasize the need for proactive housing supply measures to accommodate the additional residential demand resulting from the large-scale agency relocations. Professor Seo Jin-hyung of Kwangwoon University’s Department of Real Estate Law noted, “Assuming that at least 60% of the relocating civil servants move to Sejong, there could be a demand for about 6,000 housing units, which will be difficult to supply.”
He added, “While expectations of relocating the administrative capital drove up prices in 2020, this time we are facing actual relocation demand. There is a possibility that unmet demand in Sejong will spill over to nearby areas like Yuseong District in Daejeon, highlighting the need for proactive housing supply measures.”
* This article has been translated by AI.
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