The government’s special program to sell housing subscriptions for new apartment complexes in Sejong City to its employees turned out to be a “jackpot,” guaranteeing civil servants hundreds of millions of won right away. This housing subsidy has pushed up Sejong apartment prices by 42 percent last year, far outpacing the growth in both Seoul and the country as a whole.URL :https://sejongrealtor.com/
To encourage workers to relocate to the central city, the government made construction companies allocate a part of their new apartments for sale to government officials. Government workers bought 26 percent of the 97,000 apartment units supplied in the past 10 years, according to the government.
The Rise of Sejong: Why It’s a Hotspot for Real Estate Investors
But the special program has sparked a backlash from local residents who are unable to afford the high rent. It is also causing conflict within the ministries as young employees who were hired recently are not subject to the special program and have to find housing on their own in Sejong, where housing prices have skyrocketed.
In order to prevent the formation of a real estate bubble, it is necessary to use a valuation framework that can reflect both the Jeonse price and the HPI simultaneously. The proposed framework utilizes the spread, which is an indicator of a bubble by consolidating the Jeonse and HPI into one and can measure both supply-side and demand-side factors in real time. Moreover, it can be used in countries without the Jeonse by replacing it with the monthly rent.