Apartment complexes are seen in Dongtan District, Hwaseong, Gyeonggi, on June 30.NEWS1
Apartment prices in southern Gyeonggi’s so-called “semiconductor belt” are surging again despite tighter housing regulations, fueled by a supply shortage and an influx of liquidity from Samsung Electronics and SK hynix employees. The semiconductor belt refers to a cluster of major semiconductor production facilities spanning cities in southern Gyeonggi, such as Hwaseong and Yongin.
Apartment prices in Dongtan District in Hwaseong rose 1.46 percent in the final week of June, just before the regulatory system took effect, but slowed sharply to 0.12 percent in the third week of August, according to data released Monday by the Korea Real Estate Board.
However, the increase accelerated again to 0.54 percent the following week. Prices rose another 0.47 percent in the final week of September, the steepest weekly increase in Gyeonggi.
The renewed rise in Dongtan District home prices despite the restrictions coincided with the launch of Samsung Electronics’ in-house mortgage program, which offers employees loans of up to 500 million won ($372,000).
Since Sept. 1, Samsung Electronics has offered eligible employees loans of up to 500 million won at an annual interest rate of 1.5 percent to purchase homes priced at 2.5 billion won or less with an exclusive floor area of no more than 85 square meters (915 square feet). In-house loans are exempt from debt service ratio regulations. With conventional mortgages currently capped at 600 million won, the program gives employees access to additional financing.
Transaction volume in Dongtan District, however, has dropped sharply since the state's regulatory system took effect.
The new rules require buyers to live in the homes they purchase and prohibit gap investments — buying homes with existing jeonse (lump-sum deposit) tenants.
A total of 403 apartment transactions were registered with the Ministry of Land, Infrastructure and Transport’s real estate transaction disclosure system from July 5, when the regulations took effect, through Sunday. That was down about 91 percent from 4,362 transactions during the preceding three months from April 5 through July 4.
Some analysts say a small number of high-priced transactions may have pushed up overall price indicators amid a listing shortage caused by the regulatory system.
A person looks out over apartment complexes in Dongtan District, Hwaseong, Gyeonggi, on June 30.YONHAP
LEE JEONG-MIN
After Dongtan District was designated a regulation zone, a balloon effect emerged in July and August, with home prices rising in nearby unregulated areas such as Byeongjeom District in Hwaseong and Gwonseon District in Suwon, Gyeonggi.
Since last month, however, apartment prices have risen sharply across southern Gyeonggi’s “semiconductor belt,” regardless of whether areas are subject to restrictions. Prices in Giheung District, Yongin, which was also designated a regulation zone, have shown little sign of slowing.
Dongtan District has recorded the highest cumulative apartment price increase in the greater Seoul area this year at 19 percent, followed by Gwangmyeong, Gyeonggi, at 16 percent and Yeongtong District in Suwon and Suji District in Yongin at 15 percent each. Those increases exceed those in central Seoul’s Seongbuk District, at 15 percent, and western Seoul’s Seodaemun District, at 12 percent.
“Listings for both jeonse and monthly rentals have dropped sharply in Gyeonggi as well due to the regulation system and heavier capital gains taxes on owners of multiple homes,” a real estate agent in Dongtan District said. “But end-user demand continues to flow into the semiconductor belt, backed by liquidity from bonuses at Samsung Electronics and SK hynix. There is little reason for younger buyers not to buy.”
Some point to fatigue from the rapid run-up in home prices on Seoul’s outskirts as another factor that could drive demand toward Gyeonggi.
“Many apartments in northern Seoul now cost more than 1.5 billion won,” Kim In-man, head of a real estate economic research institute, said. “Gyeonggi still has many apartments priced at around 1 billion won. I’m concerned that the housing boom in Seoul could shift to Gyeonggi.”
This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
