Sejong housing sentiment surges on government relocation plans despite falling prices

Consumer sentiment in Sejong's real estate market has surged on news of a planned second wave of government agency relocations to the city.

The Korea Research Institute for Human Settlements said Wednesday that its August consumer sentiment survey showed Sejong's housing sale market index jumped 11.4 points from the previous month. The jeonse index also rose 7.5 points.

Sejong's sale sentiment index peaked at 124.8 in December last year before falling sharply, hovering below the 110 mark throughout this year. With an announcement of a second-phase relocation plan for central government agencies and public institutions on the horizon, however, buyers and real estate agents active in the Sejong housing market appear to be warming up again.

The government announced Sept. 3 the direction for the second phase of central government agency relocations, saying it would begin moving the Ministry of Justice and the Ministry of Gender Equality and Family to Sejong from the first half of 2027, with other agencies to follow in stages.

The announcement reflected a judgment that, while 43 agencies had relocated to Sejong between 2012 and 2021, a large number of central government ministries still remain in the greater Seoul area, and that improving inter-ministry collaboration and communication efficiency — as well as strengthening a Sejong-centered national governance framework — remained necessary.

The government also unveiled plans to build a presidential office in Sejong by August 2029 and to complete a National Assembly annex there by 2033, aiming to fully establish the city's identity as an administrative hub.

"In regional areas, the sale sentiment index tends to fluctuate more sharply when a major issue arises," said Kwon Geon-woo, a researcher at the Korea Research Institute for Human Settlements. "The government agency relocation issue appears to have had an effect — particularly notable is the sharp drop in the share of respondents saying price levels have fallen somewhat."

Despite the improved sentiment, actual housing sale prices in Sejong have yet to break out of their downward trend. According to the Korea Real Estate Board's August nationwide housing price survey, Sejong's housing sale prices fell 0.07%, a steeper decline than the 0.04% drop recorded in July. Apartment sale prices also fell 0.08%.

The gap between sale sentiment and actual transaction activity has yet to narrow. Market observers expect, however, that the government's official announcement earlier this month — and the prospect of agency relocations becoming concrete through legislative amendments — could eventually ripple through to the transaction market.

Meanwhile, Seoul's housing sale market sentiment index eased, falling to 132.5 from 139.9 the previous month. Even so, the index remains in what is considered an "upward phase."

"Real estate agents are still reporting that prices are higher than the previous month, but the share of respondents saying so has declined," Kwon said. "The index appears to have pulled back as fewer people expect further price increases."

Nationwide, the sale market sentiment index edged down to 116.7 from 119.5 the previous month, while the jeonse market sentiment index edged up to 113.5 from 112.7.