Apartment prices in Dongtan, Hwaseong, have seen a resurgence after initially slowing down following the designation of land transaction permit zones. The increase is attributed to demand shifting from soaring prices in Seoul, with Samsung Electronics employees contributing to the underlying demand. Expectations of bonuses and low-interest company loans are also supporting the purchasing power of employees.
According to the Korea Real Estate Agency, last week, the average sale price of apartments in Dongtan rose by 0.47% compared to the previous week. Since the second week of February, when district-level data collection began, the cumulative increase has reached 18.95%, the highest in the metropolitan area.
Initially, the weekly growth rate in Dongtan hovered around 0.2%, but it expanded to 0.3% to 0.4% in May and peaked at 2.22% in June. However, after being designated as a regulated area and a land transaction permit zone, the rate of increase began to decline.
Before the implementation of the land transaction permit system in the last week of June, the growth rate was 1.46%, but it dropped to 0.12% by the third week of August. Nevertheless, it rebounded to 0.54% the following week and maintained a 0.47% increase in the last week of September. While the rate of increase has decreased since the regulations were imposed, the upward trend in prices has not been halted.
Market analysts suggest that the surge in housing prices in Seoul and stricter lending regulations have pushed demand toward the relatively lower-priced southern Gyeonggi Province. Dongtan, located near Samsung Electronics' Hwaseong and Giheung facilities, is seeing an increase in purchasing power among high-income buyers.
In May, Samsung Electronics agreed to establish a special management performance bonus for its Device Solutions division. The amount of the bonus will vary based on performance, but expectations for income growth have risen due to favorable semiconductor market conditions.
Since last month, the company has also been accepting applications for internal loans to assist employees without homes in purchasing property, offering up to 500 million won at an interest rate of 1.5%. This applies to homes priced below 2.5 billion won, with a requirement that the property meets specific criteria in the metropolitan area.
A local real estate agent in Dongtan noted, "There has been a significant increase in inquiries for residential purchases, with most buyers being Samsung Electronics employees. However, about 20% to 30% of inquiries are from investors coming from Seoul and other areas."
The agent added, "Especially since the Chuseok holiday, we have seen a surge in purchase inquiries, which are still ongoing. Some people are asking about Dongtan while also inquiring about Bundang or Pangyo."
Prices in major complexes remain high. The price for an 84-square-meter unit at 'Dongtan Station Lotte Castle' is currently between 2.4 billion and 2.6 billion won. Last month, a 101-square-meter unit at 'Dongtan Station Simbeon Hanwha Dream Green Prestige' sold for 1.81 billion won, while an 84-square-meter unit sold for 1.6 billion won.
Future demand is also anticipated from the development of the Yongin semiconductor cluster. As production facilities and partner companies are established, Dongtan, with its existing living infrastructure, could be chosen as a residential area.
However, the rapid price increases in the short term have raised the amount of self-funding required for potential buyers, which could pose challenges for further price growth. It will take time for the population influx from the Yongin semiconductor cluster to materialize, making it uncertain how much of the development expectations will translate into actual purchases.
Seo Jin-hyung, a professor at Kwangwoon University’s Department of Real Estate Law, stated, "As housing prices in Seoul have surged, we are witnessing a balloon effect where demand that finds it difficult to purchase homes is moving to the outskirts. Given that Dongtan is near Samsung Electronics and is expected to see population influx from the Yongin semiconductor cluster, there is a possibility that the upward price trend will continue for the time being."
* This article has been translated by AI.
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