Cheonsang’s Evervill Apartments: Now Nevervill

It’s difficult these days to scan any part of Ulsan and not see construction cranes hard at work. Numerous new luxury high-rise apartments are going up all over the city. One wonders where all the people to live in these massive structures will come from. A big part of the impetus to create these has been the economic stimulus packages set forth in 2008, including special loans for private construction. In 2009, another 1 Trillion won (about US$661 million) was set aside. Despite the flood of money to help fuel jobs, some have already folded

The suburb of Cheonsang, just across the river from the newer and more tony Guyeongli, has seen its first casualty of the construction boom and subsequent downturn.  Evervill Apartments, a massive multi-building luxury apartment complex on the edge of Cheosang has gone bankrupt.  The unpainted gray concrete shells stand out among the cream and tan of the occupied apartments.  Calls to the main rental office of Evervill have gone unanswered.

If that were the only building contruction problem, things might still be bright. However, as with many new apartment projects, ancillary businesses spring up in the adjacent area in the hope of capitalizing on the potential new customers. There are more than half a dozen new buildings next to Evervill that will undoubtedly struggle to compete for customers, many of whom may now never materialize.

Evervill, which I have now cleverly dubbed Nevervill, is on the far northern edge of Cheonsang. Further construction north of it is blocked by Highways 16 and 24. Any potential customers for the businesses surrounding it must come from the heart of Cheonsang to spend their money – a problem since other businesses are available closer in to town. Only speciality shops, respected hogwans or academies – businesses that simply don’t have equals closer in – have any real chance of maintaining a presence so far from the remainder of occupied Cheonsang.

According to the KHL Group, a construction industry information hub, “A weak housing market in Korea will act as a brake on construction activity. To alleviate this, a stimulus package should help offset weak investment in the private sector.” Additionally, the Korean government has allocated tax cuts and spending, mostly for infrastructure projects.

Business news site OfficialWire also reports that Korea’s construction downturn will reach 16.57%  and that “residential and non-residential construction industries have both been hit hard with a nominal contraction of 24% and 7.5%, respectively, compared with Q407. They state that “although the contraction will be not as deep as we previously predicted it will be more protracted, continuing into 2010, when we believe it will contract by 4.83%.

So what does all this mean to the average reader of UlsanOnline?  Simply this: blight. Koreans are not well known for lowering prices in order to make some rather than all the money they intended. Don’t expect prices to go down as construction increases and outstrips demand. Instead, look for empty buildings. Nevervill is not the only casualty in Ulsan. Another large tower near Save Zone has also gone belly-up.

Ulsan is still too young to predict how they’ll manage things in the future. But if the recent past is an indication, look for quite a few empty shells around town.