The apartment market in the Seoul metropolitan area is showing stark contrasts based on regulatory status. While transactions in key regulated areas of Seoul and Gwacheon have sharply declined, non-regulated regions like Guri, Hanam, and Anyang’s Manan district are experiencing a surge in purchases from outside buyers, leading to a series of record-high sales. Analysts attribute this trend to relatively lenient loan conditions and the absence of mandatory residency requirements, attracting both genuine buyers and investors.
Gyeonggi Province Apartment Prices Rise 0.08%...Regional Disparities Widen
According to KB Real Estate's weekly statistics released on May 8, apartment prices in Gyeonggi Province rose by 0.08% in the first week of May, maintaining the same growth rate as the previous week. The growth rate, which peaked at 0.12% in mid-March, showed slight moderation in April but rebounded to 0.11% in the third week of April, followed by two consecutive weeks at 0.08%.
Regionally, Seongnam's Jungwon district (0.51%), Gwangmyeong (0.39%), Guri (0.36%), Anyang’s Manan district (0.28%), Seongnam's Bundang district (0.27%), and Hanam (0.25%) led the price increases. In contrast, Icheon (-0.13%), Gwacheon (-0.08%), and Hwaseong's Manseong district (-0.06%) experienced declines. The disparity between rising and falling regions has reached as much as 0.64 percentage points, indicating a growing divide within the market.
In Seongnam's Jungwon district, which recorded the highest growth rate, the depletion of affordable listings has led to a decrease in buyer inquiries, causing transactions to slow down somewhat. This week's price increases were concentrated around large complexes in Geumgwang-dong. In Incheon, apartment prices fell by 0.01%, marking a downturn this week. Only Bupyeong (0.02%) saw an increase, while Yeonsu, Seo, Michuhol, and Namdong districts remained stable, with Jung-gu (-0.15%), Gyeyang (-0.03%), and Dong-gu (-0.01%) experiencing greater declines.
Guri's Transaction Volume Surges 314% vs. Gwacheon's 85% Decline
The disparity in transaction volumes based on regulatory status is becoming increasingly pronounced. According to an analysis by real estate research firm RealToday of actual transaction data from the Ministry of Land, Infrastructure and Transport, the volume of apartment transactions in Guri, Gyeonggi Province, surged by 314% in the first quarter of this year compared to the same period last year. In stark contrast, the regulated area of Gwacheon saw an 85% decline during the same timeframe.
The concentration of demand in non-regulated areas can be attributed to differences in loan and resale conditions. Regulated areas face lower loan-to-value (LTV) limits and are subject to mandatory residency requirements and land transaction permit regulations, effectively blocking investment entry. In contrast, non-regulated areas offer relatively flexible loan limits and conditions, with looser resale restrictions, allowing both genuine buyers and investors to enter the market.
This trend is also evident in the new housing market. In February, the 'Syangyong The Platinum Onsu Station' project in Bucheon, Gyeonggi Province, attracted 1,317 applicants for 109 units, resulting in an average competition ratio of 12.08 to 1. Similarly, the 'Anyang Station Central I-Park Sujin' project in Anyang’s Manan district recorded an average competition ratio of 11.93 to 1. Both developments are located in non-regulated areas and are priced below 1.5 billion won.
Guri and Hanam See Continuous Record-High Prices Driven by Transportation Benefits
According to the Ministry of Land, Infrastructure and Transport's actual transaction disclosure system, Guri and Hanam, adjacent to Seoul, are witnessing a continuous influx of outside buyers, leading to a series of record-high prices.
Guri is particularly notable. The 'e-Pyeonhansesang Inchang Urban Forest' apartment, with a dedicated area of 84 square meters, was sold for 1.315 billion won in March, setting a new record. The opening of the extension of Line 8 (Byeollae Line) has improved accessibility to Gangnam, rapidly attracting demand from northern and southeastern Seoul. A real estate agent in Inchang-dong, Guri, stated, "While Seoul is constrained by residency requirements and land transaction permits, Guri allows entry with 200 to 300 million won in cash alongside a jeonse. With the opening of Line 8, the demand for jeonse has solidified, reducing investment risks, prompting investors to quickly acquire lower-priced listings from Gangnam."
Hanam's Misa River City is also experiencing steep price increases. The 'Lunarrium' apartment, with a dedicated area of 84 square meters, was sold for 1.295 billion won last month, while the Misa River City Complex 8 Star Hills, with a dedicated area of 51 square meters, also set a record at 900 million won. The trend of record-high prices continues in the Gwangmyeong and Anyang areas as well. Anyang's 'Raemian Anyang Mega Tria' apartment, with a dedicated area of 59 square meters, sold for 930 million won, and the 'Lotte Castle Signature' apartment near Gimpo's Pungmu Station, with a dedicated area of 75 square meters, changed hands for 738.5 million won, also reaching a new high.
In contrast, key areas in Seoul are facing challenges due to land transaction permits and high prices, making it difficult to leverage jeonse. Meanwhile, regions like Guri, Hanam, and Anyang's Manan district still have relatively high jeonse rates and lower upper price limits, allowing for ownership transfer with smaller capital investments.
In fact, some non-regulated areas like Anyang's Manan district have dominated transaction volumes in Gyeonggi Province this year, emerging as key investment destinations in the metropolitan area. The concentration of demand for properties priced below 1.5 billion won aligns with the high-end apartment loan regulations (prohibiting mortgage loans for properties over 1.5 billion won). Ultimately, the influx of investment demand exploiting regulatory gaps is driving price increases in non-regulated areas.
However, market participants are cautious about the sustainability of this trend in the long term. A representative from a real estate agency in Guri noted, "Demand for gap investments is sensitive to interest rates and the stability of the jeonse market. If adjustments in jeonse prices become evident, the risk of reverse jeonse could materialize, necessitating careful consideration when investing funds."
* This article has been translated by AI.
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