Sejong City shakes up Gwacheon
The situation for business owners in Gwacheon, however, will be difficult for the next few years as the ministries move to Sejong City, the new administrative capital in South Chungcheong, about 120 kilometers (75 miles) south of Seoul. Restaurant and business owners are concerned.
“The only asset that we have is visitors from nearby,” said an anxious restaurant owner. “We have no choice but to lose [sales].”
The meat restaurant, which is located inside an arcade 10 minutes from the government complex, has served the workers from the complex for the past 10 years. Almost all of its customers are ministry workers.
Following the Prime Minister’s Office in central Seoul, which will shift its location to Sejong City in September, four of the seven ministries located in Gwacheon will start moving in November. The Ministry of Land, Transport and Maritime Affairs and the Ministry for Food, Agriculture, Forestry and Fisheries will relocate themselves from Gwacheon to Sejong City in November, and the Ministry of Strategy and Finance and the Ministry of Environment will move in December.
(The others are the Ministry of Knowledge Economy and the Ministry of Labor, which will move next year. The Ministry of Justice will remain in Gwacheon.)
A total of 4,862 employees will have moved from Gwacheon to Sejong City when the six ministries and their agencies make the transfer.
But things could eventually pick back up, as over the course of the next three years, other public agencies, including the Korea Communications Commission and the State Science & Technology Commission, are slated to move in to Gwacheon. Some 5,600 employees of 14 separate commissions are expected to move into the area the ministries are leaving behind.
Gwacheon faces tough times
The commercial area near Gwacheon was established in the early 1980s when ministries started moving to the government complex in 1982. Currently, there are around 400 restaurants nearby, of which around 30 to 40 are regularly visited by government workers. They have gone through many ups and downs, restaurant owners say.
Both the Asian financial crisis in the late 1990s and the global economic crisis in 2008 caused a decline in sales. Store owners say ministries moving out of Gwacheon will be even worse for their businesses.
“It’s going to be more difficult for us to earn a living when the ministries leave,” said another restaurant owner. “Last year’s sales were bleak because of the bad economy and also, with the news covering Kim Jong-il’s death, many officials canceled their reservations for year-end gatherings.”
The decision to move the country’s administrative capital to Sejong City is causing dissatisfaction among store owners near the current government complex.
“Recently, we went to Sejong City to see if conditions would allow us to move our restaurant there, but the sites were plain empty,” said one of the store owners in Gwacheon. “Real estate agency people told us that the area will settle soon when government officials move in, but it won’t be as easy as they said.”
She said that it will take more than 10 years for the city to adjust and to draw necessary facilities like restaurants, convenience stores and pharmacies.
“The new city isn’t an attractive place because it looks like public workers will go back to Seoul to see their families on the weekend. There will be no consumption then.”
It’s not just the restaurants that are faced with concerns. More than 70,000 residents in Gwacheon are also upset due to falling housing prices. Last year, apartment prices in Gwacheon dropped by 6.17 percentage points, which is more than the drop in Seoul (1.58 percentage points).
The housing situation
In contrast, the real estate market in Sejong City is seeing a boost, and the government hopes more people will be interested in moving to Sejong.
Last year, the state-owned Land & Housing Corporation gave out drawings of apartments in Cheotmaeul, the first village in Sejong City. Private construction companies, including Daewoo Engineering & Construction and Posco Construction, have also given out drawings of their apartments.
The competition was fierce as there were a total of 11,600 units offered but more than six times the applicants to buy them. According to the Multifunctional Administrative City Construction Agency, 16,000 units will be made available this year in a drawing. Housing prices are also cheaper than other nearby areas like Daejeon. Sejong City is about an hour and 15 minutes from Daejeon Station.
“We are moving to Sejong City next month,” said a resident from Banseok-dong, Daejeon. “It’s a new house, but the price is cheaper than Daejeon.”
Lim Jeong-min, a real estate agent in Sejong City, said that “the city will be like Bundang in five years.” Bundang is an upscale suburb of Seoul.
But there is also criticism that the city could draw illegal real estate investments if private citizens buy apartments and then resell them for a profit.
According to real estate sources, there are people who buy and sell houses in Sejong City without going through the proper selling and buying process for investment purposes. They sell houses at a higher price than the actual market price and also take large commissions from people.
According to the real estate industry, the price of a 59-square-meter (635-square-foot) apartment in Cheotmaeul is in between 180 million and 190 million won ($158,400 to $167,200), while an 84-square-meter residence is in between 240 million and 290 million won. Industry experts said that the prices have gone up 80 million won recently due to anticipation that the price will increase even more as demand increases.
Criticism aside, the government still has high hopes of establishing the new city as the country’s administrative capital.
By Lee Eun-joo [firstname.lastname@example.org]
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