[EDITORIALS]Land prices set to soarStarting next month, land compensation for about 22 million pyong (17,971 acres) that have been slated to become a government administrative city will take place in some parts of the Chungcheong province.
The government estimates that 4.6 trillion won ($4.4 billion) will be spent in compensation but citizens living in those areas are demanding more, making it uncertain what the final price tag will be.
In addition, the government has estimated another 1.4 trillion won will be needed in compensation for five business hub cities, such as Muan and Chungju.
Land compensation for the nine cities where public organizations and parastatal companies will be moved is also expected to start next year.
The land area targeted for these purposes is estimated to be over 20 million pyong and how much money is needed to compensate landowners for this has not even been calculated. Nationwide, an extraordinary amount of money for compensation is expected to be used to build these various cities.
Land and real estate prices in these areas have already risen, with many places commanding prices two to three times higher than last year. The government has tried to step up controls but in vain.
In addition, in cities such as Jinju, South Gyeongsang province, which have been selected for these developments, planting of seedlings and setting up of plastic greenhouses is increasing as compensation for land where cultivation remnants exist is higher. Provincial governments have tried to regulate these actions but with little effect as it is difficult to determine what is illegal for purely profit-making purposes and what is not.
Due to the fashion for building various cities under the name of administrative or business cities, a storm has been created in the real estate market by those who want to capitalize on these opportunities. Thus, with all these side effects, much difficulty is expected when the government and provincial governments start paying compensation and money gets injected nationwide.
But the most worrying part is that, due to this compensation, real estate prices in the whole country will rise steeply.
We are worried that the construction of these new cities, which comes with wide negative effects caused by all kinds of illegal activities aimed to get more compensation, coupled with a rise in real estate prices, will bring an equal rise in real estate prices on a national level, rather than a balanced development of the nation.