Gwangju Land, Home Prices Jump 30% on Chip Cluster Plan

The area around KTX Gwangju Songjeong Station on the morning of the 10th of this month was so quiet it was hard to spot a single person walking the streets. Even inside the 1913 Songjeong Station Market, a commercial district near the station, a hushed atmosphere hung over every restaurant and shop. But there was one place where people came and went constantly: real estate brokerages handling homes and land in the area.

At Kumho Yun Real Estate, located about a 10-minute walk from Gwangju's military airport, which has been confirmed as the site for a national semiconductor industrial complex in the Honam region, purchase inquiries by phone and visitors were pouring in. During the roughly 30 minutes this reporter spent there, buyers looking to purchase detached houses in Songjeong-dong and sellers asking about selling land visited the store in turns.

"The local commercial district was stagnant, so there were hardly any real estate customers, but since the 6th, when the military airport site was confirmed as the location for the semiconductor cluster, inquiries about homes or land to build new buildings have been pouring in," said Yun Byung-ha, head of Kumho Yun Real Estate. "The people who visit are mostly local residents, but calls come in from Seoul and all across the country." He added, "Even though this is a key commercial area right in front of the station, it had become quite run-down. With this semiconductor fab construction combining with the Gwangju Songjeong Station area development, expectations for overall regional development are very high."

As a large-scale semiconductor cluster is being pursued in the Jeonnam-Gwangju Integrated Special City, expectations across the local economy are growing. On the 29th of last month, the government announced a total investment plan of 800 trillion won as part of the "three major mega projects," including building a semiconductor fab in the southwestern region. On the 6th of this month, it selected the Gwangju military airport site as the location for the semiconductor industrial complex. Expectations have swelled both inside and outside the region that Honam, which had been shrinking due to population outflow and unsold housing, could leap forward as a new axis of industrial development and balanced national development.

Real estate was, as expected, the first to move. According to local brokerages, in Seochang-dong, Seo-gu, located across the Yeongsan River from the Gwangju military airport, more than half of sellers withdrew their listings after the 6th of this month, causing deals to fall through one after another. Four or five or more transactions collapsed as sellers expecting price increases canceled contracts. An official at brokerage A in Seochang-dong said, "There's a lot of farmland here, and right after the announcement, sellers withdrew their listings or sharply raised asking prices. As a wait-and-see mood strengthened among sellers who feel uncertain about what will happen, cases of deals being canceled even right before signing keep occurring."

Signs of change are also appearing in the stagnant housing market. As of May this year, unsold private apartments in Gwangju totaled 1,259 units, down from 1,400 at the end of last year, but the burden of oversupply remained. However, as expectations for job creation and population inflow from the semiconductor cluster grow, the market mood is changing rapidly.

For example, in the Cheomdan 3 district, which is expected to become one of the residential areas behind the semiconductor cluster, presale contract transactions have increased and "negative premiums" have disappeared. Hillstate Cheomdan Central in Jangseong-gun, scheduled for occupancy in October this year, saw 65 presale contract transactions in June alone. This is more than double the 30 transactions in the previous month. An official at a local brokerage said, "Right after news related to the Honam semiconductor cluster spread, customers flocked in so much there was no room to sit in the office. Many of the presale rights that hadn't sold and carried negative premiums have been used up, and as sellers withdrew listings, the number of tradable properties has sharply declined."

An overall decline in apartment listings across the Gwangju region is also being detected. According to real estate big data firm Asil, Gwangju apartment listings totaled 25,968 on that day, with 970 disappearing in about four days. Although the government designated the military airport site and surrounding areas as a land transaction permit zone for two years from the 14th to July 13, 2028, to prevent speculative demand and market overheating, on-site experts say interest centered on genuine buyers will continue.

Large-scale development projects underway nearby are also expected to create synergy with the semiconductor cluster. Champions City (4,315 units), a mixed-use development project on the former site of Jeonbang and Ilshin Spinning in Gwangju, is set for presale in the second half of this year. The Gwangcheon Terminal complex development project recently passed a traffic impact assessment and is undergoing licensing procedures targeting completion around 2030. The Gwangju Songjeong Station KTX investment leading district development project is also gaining speed, having announced its compensation plan on the 6th of this month.

Jin Hee-sun, adjunct professor of urban engineering at Yonsei University, said, "We have pursued policies to disperse the population from the greater Seoul area, but in the end people move following industry and jobs." He added, "This project has great significance in that it creates a new growth axis where companies, jobs, and talent circulate in a virtuous cycle." He stressed, "For the project to succeed, it must be supported by special legislation that can quickly process various licenses and approvals." Lee Jong-hwan, professor of system semiconductor engineering at Sangmyung University, also said, "Large-scale workforce demand will arise not only at large corporations but also at small and medium-sized enterprises, so a talent development system through industry-academia cooperation with local universities must be built together for the project to settle stably."