Sejong's property market is stirring after the government announced plans for a second round of central administrative agency relocations. About 3,000 civil servants will move to Sejong next year, with nearly 10,000 arriving by 2031 — equal to two-thirds of the 14,731 employees at the 43 agencies already based in the city. Counting family members, the actual population inflow would be even larger, fueling expectations in the local market.
According to local real estate brokers and the Korea Real Estate Board on the 13th, Sejong's apartment market has shown weak sales prices alongside strong lease demand. Apartment sale prices in Sejong fell 0.93% from the start of the year through the first week of October, in contrast to a 2.89% rise nationwide over the same period. Prices declined in five of the past six weeks. Jeonse prices, by contrast, jumped 4.46% so far this year, rising 0.06% to 0.14% each week over the past six weeks.
Market watchers expect both sale and jeonse prices to strengthen following the relocation decision. The lease market is likely to react first, since relocating officials are more likely to rent before deciding whether to buy. If new demand converges on neighborhoods already popular with existing civil servants, upward pressure on rents will intensify.
A nationwide shortage of rental listings, driven in part by policies encouraging owner-occupancy, is also evident in Sejong. The head of one local brokerage said jeonse prices have risen sharply over the past year, with deposits at some apartment complexes climbing to 100 million won (about $70,000). Monthly rents for units of about 25 pyeong have risen to around 750,000 won from 600,000 won, and for 34-pyeong units to 1.2 million won from 900,000 won, the broker said. Competition is especially fierce near the government complex, where no additional supply is planned, and listings could dry up even in outlying areas if more officials move down from Seoul, the broker added.
In the sales market, hopes that the relocation will break a prolonged slump coexist with concerns about financing costs. The same broker said a small number of buyers are looking at purchases for investment or for later occupancy, but activity remains quiet, citing lending restrictions and high presale prices. Even the smart city project, which had drawn attention, has seen limited interest, with presale prices of about 700 million won for a 34-pyeong unit weighing on demand.
Others are watching whether Sejong could repeat 2020, when apartment prices surged nearly 50% in a single year. A mid-level official at a central ministry who has settled in Sejong said word spreads quickly in a small city made up largely of civil servants, and that adding 10,000 people to a population of under 400,000 would have a significant effect on apartment prices.
The key variable is livability. If workers relocate while their families remain in the greater Seoul area, the boost to housing and local consumption could be limited — meaning education, transportation, health care and private-sector jobs need to keep pace. A special housing supply program for employees of relocated agencies was abolished in 2021, and whether it will be revived has not been decided. Commuter buses linking the Seoul area to the Sejong government complex were also scrapped in the wake of the Korea Land & Housing Corporation (LH) scandal. Among staff at the agencies slated to move, a considerable number are said to be considering commuting from Seoul by KTX high-speed rail, citing their children's schooling.
Commuting by KTX while leaving families in Seoul has already become an established pattern in Sejong. According to Korail, passenger numbers between Osong and Daejeon stations and Seoul and Yongsan stations rose 85.9% over four years, from 5.832 million in 2021 to 10.842 million last year. Some observers say demand for small officetels and studio units near the government complex, rented by weekday residents, may pick up before family relocations do.
That pattern also shows up in the country's highest commercial vacancy rate. Sejong's retail vacancy rate stood at 22.8% in the second quarter of this year, far above the national average of 13.4%, according to the Korea Real Estate Board. The rate was up from 19.0% in the first quarter of last year and worse than the 21.5% recorded in the first quarter of this year. A local broker said conditions are serious, with vacancies up 10% to 20% from a year earlier, and that commercial districts struggle to gain traction because residents return to their homes in Seoul every weekend.