Sejong City emerged as a hot topic in South Korea’s real estate market in the late 2010s. By 2020, property prices skyrocketed by 40%, making it a magnet for investors. However, the city’s fortunes have taken a drastic turn since then, with continuous price declines over the past four years. In this post, we’ll dive into Sejong’s real estate market—its rise, fall, and future outlook.
The Rise and Fall of Sejong City’s Real Estate
1. The Boom: Up Until 2020
Sejong City was developed as South Korea’s administrative capital, attracting attention with large-scale government relocation projects. By 2020, the city became a prime spot for investors, fueled by speculative demand. There’s even a well-known story about groups renting 45-seater buses to sweep up apartment deals.
2. The Decline: Post-2020
However, since peaking in 2020, property prices have been on a steady decline for four years, with no signs of recovery in 2024. Key reasons include:
- Lack of demand: Sejong’s appeal has waned for speculative buyers, leaving only real residents in the market.
- Weakened price dynamics: Unlike Seoul, Sejong lacks the synergy between rental (jeonse) and sale prices that helps stabilize markets elsewhere.
- Stagnant population growth: As of 2024, Sejong’s population is approximately 390,000, with an annual increase of less than 4,000 people—far below its 2030 target of 500,000.
Key Issues Facing Sejong’s Real Estate Market
1. Over-reliance on Administrative Functions
Sejong was established as part of a national strategy to decentralize government institutions. However, simply moving offices hasn’t created the self-sustaining economic ecosystem the city needs.
2. Supply-Demand Imbalance
During its development phase, Sejong experienced a housing construction boom. But with demand failing to keep pace, oversupply has driven prices down.
3. Underdeveloped Infrastructure
Sejong lacks the cultural, economic, and transport infrastructure that defines larger metropolitan areas like Seoul. This makes it less attractive for younger generations and businesses.
Seoul vs. Sejong: The Role of Infrastructure
Seoul remains South Korea’s economic, cultural, and transport hub. Despite the development of new towns and government relocation projects, Seoul’s property prices remain largely unaffected. The reason? Seoul’s infrastructure is irreplaceable.
Sejong, on the other hand, struggles to compete. Without robust infrastructure, it cannot attract the population and economic activity needed for long-term growth.
Future Prospects and Advice for Investors
Sejong City’s real estate market is unlikely to see a rapid rebound in the near future. However, there are still opportunities for those with a long-term perspective:
- Policy Shifts: If new initiatives expand Sejong’s economic role beyond administration, its market may gain momentum.
- Undervalued Opportunities: As prices continue to fall, some areas may present attractive entry points for long-term investors.
Key Tips for Real Estate Investment
- Focus on future value: Prioritize areas with long-term potential rather than chasing short-term gains.
- Assess infrastructure: Don’t just look at price—evaluate the region’s accessibility, amenities, and growth prospects.
- Liquidity matters: Choose properties that are easy to sell when needed, even in a down market.