While the government maintains strict regulations on the real estate market in the capital area, it is pouring out large-scale investments and support measures to attract businesses, foster high-tech industries, and improve living conditions in the provinces, making all-out efforts to revitalize the region.

This is because the polarization of the real estate market between the capital area and the provinces has reached its limit, characterized by severe unsold properties, long-term vacancies resulting from the lack of established commercial districts, and empty offices due to the failure to attract companies. As industry, finance, and major corporations have been concentrated in the capital area, the provinces have suffered from a vicious cycle of population decline and the outflow of young people, which has consequently weakened both housing demand and underlying consumption power.

At the 10th Central-Local Cooperation Conference held on August 26, the government stated, “Overcrowding in the capital area and the crisis of regional extinction caused by regional imbalances are eroding the competitiveness of the entire nation,” and presented balanced development as an essential strategy for national survival. Accordingly, it is embarking on a major policy shift to attract companies and personnel to fill the space, moving beyond the approach of simply constructing buildings.

Korea's Three Major Mega-Projects for a Great Leap Forward… The Core Driving Forces Moving the Market

The "Three Major Mega-Projects" announced by the government are a strategy to foster key industries that will create large-scale enterprises and jobs in regional areas. Unprecedented investment and infrastructure support will be concentrated at every regional hub, centering on semiconductors, AI robots, and ultra-large AI data centers. The market views these measures as a massive relief pitcher to revive the stagnant regional real estate market.

First, regarding the semiconductor sector, as soon as the construction of four semiconductor factories worth 800 trillion won in the Southwest region was announced, the Gwangju and Jeonnam areas (364.19㎢) were designated as land transaction permit zones—an unprecedented measure for a provincial area—to prevent speculation. This is an extremely unusual measure for a provincial market that had been in a deep slump, demonstrating the powerful market impact of mega-projects. HBM and packaging hubs will be established in the Chungcheong region, while semiconductor component innovation hubs will be built in the Southeast and Daegyeong regions.
Second, the AI robot sector will promote the AI transformation of the manufacturing industry and establish a regional-centered mass production system for robots by creating a robot foundry and parts cluster in Saemangeum. Third, regarding AI data centers, the plan is to partner with major corporations such as SK, GS, and Naver to create mega-clusters worth 550 trillion won across five regions, thereby developing local areas into hubs for the advanced IT industry.

To support this, the government plans to build infrastructure for an 'electric nation,' such as achieving 100 GW of renewable energy by 2030 and introducing a differentiated electricity pricing system by region, and to support a fast track that significantly shortens licensing procedures.

Regional Development Package… From University Support to Improved Living Conditions

Government policies aimed at revitalizing local regions do not stop at industrial investment. The key is to simultaneously implement a massive education and settlement package to procure and retain the essential "talent" needed in the "5 Mega Cities and 3 Special Autonomous Provinces" regions where mega-projects will be built.

The government and the ruling party have decided to actively reflect measures in next year's budget to strengthen support for regional national universities and drastically alleviate the burden of tuition fees, and are also pushing for the introduction of an "internship semester system" that recognizes one semester of internship work for academic credit. In addition, they are reviewing a support package for youth settlement, including the establishment of a "Regional Future Growth Support Fund," the expansion of rental housing supply for young people, and the "Our Child Self-Reliance Fund."

As these unconventional support measures materialize, admissions experts and communities are already predicting that the competitiveness of regional national universities will be significantly strengthened. Analysts suggest that with mandatory local talent recruitment systems already established by public institutions and local companies, the addition of tuition relief and academic credit recognition for internships could create a virtuous cycle where top local talent settles down without the need to travel to Seoul at high tuition costs.

Significant Decline in Vacancies… Regional Real Estate Market Showing Warmth

Following a flood of unprecedented favorable factors attracting both businesses (industries) and people (talent) to the provinces, the provincial real estate market is actually showing signs of improvement.

According to the Korea Real Estate Institute's '2026 Q2 Commercial Real Estate Rental Trends Survey,' office vacancy rates decreased significantly compared to the previous quarter, centered around some regions such as North Chungcheong Province (-1.71 TP3 Tp), South Gyeongsang Province (-0.91 TP3 Tp), and South Chungcheong Province (-0.71 TP3 Tp). Looking at the annual trends over the past year, office vacancy rates in major regions such as Chungnam (-6.51 TP3Tp, 12.01 TP3T), Gyeongnam (-3.11 TP3Tp, 16.01 TP3T), Jeju (-2.61 TP3Tp, 5.01 TP3T), Gangwon (-2.11 TP3Tp, 22.61 TP3T), and Busan (-1.21 TP3Tp, 16.11 TP3T) all showed a downward curve, indicating that actual rental demand was filling up.

The residential real estate market has also improved noticeably compared to last year. According to KB Kookmin Bank statistics from the end of August, apartment sales prices in the six major provincial cities rose by 0.211 TP3T from January to August this year, showing a stark contrast to the same period last year (-1.281 TP3T). Major regions such as Jeonnam (+1.331 TP3T), Jeonbuk (+1.271 TP3T), and Chungbuk (+1.051 TP3T) are also continuing their upward trend. While there are still regions struggling with unsold properties and high vacancy rates, the assessment is that warmth is definitely returning, centered around key hubs.

Will the government's regional revitalization plan succeed?

Ultimately, the key to revitalizing local real estate lies not in the technology of filling vacant buildings, but in bringing businesses and people together to get the local economy running again. Sustainable recovery becomes possible only when companies are attracted to create jobs, and the influx of people settles down to support commercial areas and housing demand.

Expectations are high that the government's '5 poles and 3 special' blueprint and mega-project policies, which aim to relocate both industry and people simultaneously, will be able to revive the local commercial and residential real estate markets, which have been in a long slump, from the roots.