The article was triggered by a decision from the Korean Ministry of Land, Transport and Maritime Affairs to strip part of Geomdan New Town from its New Town status, consequently allowing residents to follow new projects of their own. The journalist mentions other new towns struggling in the capital region (a.k.a Sudogwon = Seoul + Incheon + Gyeonggi-do): new ones - such as in Dongtan or Paju - as well as old darlings - Yongin and Bundang lost 22 and 25% of their value over the past 5 years.
The 10 projects listed in the article** are expected to deliver 613,000 apartments for 1.6 million people between 2001 and 2020. I think most dwellings have already been completed, but they only represent a portion of all Sudogwon new towns - the ones with national government support (for instance not a single one in Seoul, not Incheon's Songdo and Cheongna, not Gyeonggi-do's Namyangju and co...). And of course there's the competition from yet other new towns: property value in Sejong City jumped by almost 22% last year, compared to a disappointing 2.18% for Sudogwon, and net migration into Sudogwon nosedived from 209,000 people in 2002 to 8,000 in 2012. And of course, new towns themselves represent only a portion of all urban developments***.
By 2020, the population of Seoul Capital Area is expected to be the same as it is today, about 25.5 million souls. Of course, household structures do evolve, and change in North Korea could radically modify the equation, but again, you can't beat demographics, and this is a non-zero-sum game: even if, by miracle, all these New Towns were to succeed, some Older Towns would necessarily fail.
And again, this is "the end of an era, but not yet the end of the real estate dream"*. The "apateu = guaranteed jackpot" illusion is not completely dead, and new mirages keep popping up.
From the start, Geomdan New Town was not the sexiest project. And even downsized, it will struggle next to Gimpo New Town, a huge bed town recently delivered, and not very far from Magok District (see "Magok District: SIM City as in "Seoul Intra Muros"? Alleyways as in "Seoul Inter Muros"?"). Something's gotta give between all the residential projects, but also between their industrial sidekicks (over 2.2 M square meters for the new and improved Incheon Geomdan General Industrial Complex). Geomdan's New Town status was granted in October 2006, at the peak of the bubble, and many projects have been reconsidered in the years that followed, but I don't remember seing any strategic vision laid out regarding the big picture following the big collapse. Only more denial, and new non-vital projects specially designed to help friendly constructors keep busy and afloat.
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| Today's KJD article |
At a time when financial products propose yields barely superior to inflation rates, Sejong City's +22% could sound sexy, but this project was a walking dead not so long ago, and remains subject to political hiccups. Furthermore, Sejong City demonstrated once more the limits of urban planning in Korean new towns: after lobbying against a KTX station that would have allowed many civil servants to commute to Seoul instead of settling down in the new adminstrative center, authorities are now complaining about the lack of connections with the capital.
Nothing new under the sun: I was flabbergasted to learn that the subway between the future Incheon International Airport and Seoul would be on purpose delayed until years after ICN's inauguration, just to spare cab drivers. And outraged to see how Pangyo had been designed against all elementary rules of urbanism****. I once discussed with Seoul urban planners about the need to take into account all the impacts of a new town (for instance on traffic) from the earliest stages of the conception of a project, instead of trying to catch up and fix things after the delivery, and they said it would be nice if directions could work together to make that happen... When they do exist, impact studies are seldom comprehensive, which shouldn't come as a surprise when structural decisions regarding pharaonic projects can be made and unmade on impulse, ahead of a last minute press conference.
Yesterday, George W. Bush was invited for a few hours in Seoul to boost some real estate project. One could have expected a more relevant anti-real-estate-bubble lucky charm for Korea.
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* I didn't spare Seoul new towns either, including in my 2011 essay "Inhuman, all too human Seoul":
One megapolis, a hundred villages, a thousand faces
1)The industry of a dream - the ideal city
- Industrial revolution of housing: from the virtuous cycle to the bubble
- From mass market products to fashion and services, from utopia to dystopia
2) Humans in transit
- Communities and shared spaces
- Life and survival of Seoul villages
3) The Ideal City 2.0 and new utopias
- The end of an era, but not yet the end of the real estate dream
- From "hard city" to "soft city"
- From New Town to Human Town, villages are back in favour
Conclusion
** Geomdan, Gimpo Hangang, Dongtan 1, Dongtan 2, Pyeongtaek Godeok, Gwanggyo, Pangyo, Wirye, Yangju, Paju Unjeong
*** Sign of the times: today, in the paper, there was a leaflet for an apartment block from the "premium" brand everybody fought for just years ago. Now the sales pitch highlights the fact that the price tag is KRW 250 M below that of the neighborhood, and there's even a coupon to claim a gift if you visit the model house...
**** see "Pangyo from scratch to crash". Note that even if Pangyo New Town is becoming a laughingstock for urbanists, wealthy investors keep purchasing land around it to build their private mansions, the latest fad for a flock that previously migrated from Hannam-dong to Apgujeong-dong to Bundang. They'll probably join the lobby pushing for a new airport East of Seoul, the perfect vehicle to boost land value back to pre-bubble levels in a distressed area.
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