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Rresidents read the prices posted on the window of a real-estate agency in Guri, Gyeonggi Province on November 3.
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Certain areas are red-hot, others see no price appreciation whatsoever
A 38-year-old office worker named Min Gyeong-cheol - not his real name - owns a 100-square-meter apartment priced at 180 million won (US$190,000) in Euijeongbu, Gyeonggi Province. He bought the apartment three years ago, but the going price for his unit has not risen at all. Meanwhile, one of his co-workers purchased a 56-square-meter apartment in Godeok-dong, Gangdong-gu, Seoul, three months ago at 450 million won. The price of his apartment has already risen to 570 million won. The owner, however, complains that the rise in value of his apartment is far less than that seen in other areas. Min’s wife is urging that they move to Seoul for their two sons’ education, but to do so, they would have to take out a loan of more than 200 million won. Min said, "It is really embarrassing to see housing prices rise 10 million won overnight [while our apartment stays the same price]. Even if I save money for a year, I won’t have the amount of money needed [to move to Seoul]." Apartment prices, already on the rise, have skyrocketed since last month. The government has declared that housing prices would fall near the end of the year, but people who believed the government now feel like fools. People are rushing to make purchases on the real-estate market, fearing that prices will rise further. Park Gyeong-un, 35, who visited a real-estate agency to see about moving to the Seoul satellite city of Guri, Gyeonggi Province, felt hopeless, as apartment prices have gone up over 100 million won in a month. An official of a real estate agency in Guri said, "Apartment prices in Guri hadn’t changed at all, but then suddenly rose about 100-200 million won in a month."A representative of a real-estate agency in Namyangju, Gyeonggi Province, advised people to buy an apartment now, citing rising apartment prices. An official of an agency in Mok-dong, Yangcheon-gu, said, "It is the biggest real-estate hike since Dangun," or when the mythical founding father created Korea. The current hike is not a situation exclusively limited to traditionally hot real-estate areas, such as Gangnam and Mok-dong in Seoul. Housing prices began to rise after the announcement of the winners of bids for slots at the Pangyo Apartments in Gyeonggi Province on October 12 and the government announcement on October 23 of a plan to build new Seoul satellite cities added fuel to the fire. Kookmin Bank in Yeouido has received five to seven visitors daily since the Chuseok holiday on October 6 seeking consultation regarding real-estate transactions, compared to the one or two seen per day before the holiday. Min Byeong-su, a manager of the bank, said, "Most of these visitors are office workers working at companies in Yeouido. They don’t own their own homes. They feel uneasy, thinking house prices will continue to rise, so they think they should get a loan to buy an apartment. However, many of them give up purchasing a home due to the size of a loan they would have to get. They can’t pay the interest." Kim Cheon-gyeong, 33, signed a contract for a 120-square-meter apartment in Sujeong-gu, Seongnam City, two weeks ago. The price of the apartment has already jumped. According to a local real estate agency, there are almost no apartments up for sale, but there are a number of persons seeking to buy. One office worker, 32, signed a contract for a 116-square-meter apartment in Mok-dong at 1.08 billion won in August and now its price has risen to 1.3 billion won. A housewife, who planned to buy a small apartment in Mok-dong, has made frequent visits to real estate agencies since August. The price of an apartment went down to 430 million won from 470 million at the beginning of the year. Believing the government’s announcement that prices would continue to drop, she decided to wait a little longer. However, the prices took a turn, and now the cost of her desired apartment is 550 million won. She regrets she did not follow the advice of a real estate agency in the neighborhood, which warned her not to trust the government. Regarding the housing price situation, one netizen wrote on an online discussion board, "Roh Moo-hyun didn’t give up. He was just defeated," referring to the current administration’s attempts to quell the precipitous rise in housing prices. The government had declared that the effects of its March 30 and August 31 measures to stop the jump in housing prices would manifest themselves at year-end, but with the latest price hikes, what little remaining trust in the government on the issue has completely vanished. Park Gyeong-un, who had wanted to live in Guri, said, "Under this administration, we can’t set a plan [for real-estate purchase] because it is impossible to predict housing prices." The recent real-estate price hike makes both homeowners and home-seekers uneasy. Those who bought a home with a loan are worried, thinking the value could fall at any time. A 36-year-old woman nearly abandoned the dream of owning a home after her bid for the Pangyo Apartments failed. "If I buy a house with a loan," she said, "I will be in trouble all my life in order to pay back the loan. It seems that everyone right now is passing a bomb back and forth, hoping it won’t explode while they are holding it."
