Jeju property market booms after lagging for years

Economy

Published: 05 Aug. 2021, 19:05 Updated: 05 Aug. 2021, 19:12

Jeju property market booms after lagging for years

A view of Nohyung I’Park, an apartment building in Jeju City. An 84.95-square-meter unit in the building sold for 840 million won in July, while a unit with the same dimensions sold for 550 million won November last year. [CHOI CHOONG-IL]

Until recently a laggard in the property boom, the Jeju market is starting to make up for lost time as buyers flock to the island.

According to Korea Real Estate Board, average apartment prices in Jeju rose 12.21 percent this year through July 26. Nationwide prices are up 7.77 percent in the same period.

In Jeju City, prices rose 14.52 percent.

Prices on the island rose 0.69 percent in the week ended Aug. 2, the most rapid increase of any province or city not in a province.

Until recent, the Jeju property market had performed poorly. From the start of President Moon Jae-in’s term and 2020, average apartment prices in Korea rose by 6.98 percent while Jeju’s fell 2.99 percent.

Prices rose 8.5 percent in 2016 then started to plummet the following year. As relations with China deteriorated, the number of Chinese buyers and tourists fell. In 2017, prices rose 0.35 percent. They fell 2.35 percent in 2018 and 2.68 percent in 2019, and rose 1.17 percent last year.

Some investors believe that falling prices present an opportunity.

“Jeju’s prices have been falling throughout the past three years,” said Park Hap-soo, KB Kookmin Bank's senior real estate consultant. “But prices managed to rebound as people who want to buy apartments at a low price have entered the market.”

According to real estate website 10,000-lab, Jeju was the top pick for apartment buyers in Seoul, with 164 purchases made by them during the first half of 2021, a 100 percent increase on year. Non-Jeju residents made 24.5 percent of the apartment purchases in Jeju during the same period, up 5.5 percentage points on year.

“Domestic travel surged due to Covid-19 and an increasing number of people are moving to Jeju to send their children to international schools here, which has been pushing apartment prices up,” said a real estate agent in Jeju City.

A 59.3 square meter (638.3 square feet) apartment located on the second floor of a building in Ido-dong, Jeju City sold for 830 million won ($726,000) on June 3. Another unit with same dimensions and located on the third floor sold for 570 million won in December last year. Prices are expected to jump higher, as a same-sized apartment in the building is currently at 980 million won.

Nohyung I’Park is considered to be one of the most expensive addresses in Jeju City, and prices of its units are on the rise. A 84.95-square-meter unit on the ninth floor was sold for 840 million won on July 22, while an apartment located on the sixth floor of the same building sold for 720 million won in April. Prices were cheaper by hundreds of millions of won last year, with a sixth floor unit selling for 550 million won in November.

For people who weren’t able to buy an existing apartment, house subscriptions have been another popular choice.

A total of 2,802 people signed up for apartment subscriptions for Central Park Apartment, a building located near Jeju International Airport. Only 204 slots were open, for a subscription ratio of one to 13.7.

BY KIM WON, LEE TAE-HEE [lee.taehee2@joongang.co.kr]