1,305 buyers in May account for 10% of all first-time purchases in Gyeonggi Province; those in their 20s and 30s make up 64% of buyers; apartment prices up 5%, raising prospect of regulatory designation
The number of first-time homebuyers in Dongtan surpassed 1,300 in May, a 165 percent surge from the start of the year, as the semiconductor hub's real estate market shows signs of overheating driven by large bonuses and in-house loan programs at major chipmakers.
Apartment prices in the area have climbed more than 5 percent this year alone, prompting growing calls for Dongtan to be designated a land transaction permit zone or a regulated area — though the government says it has not yet begun reviewing such a move.
According to the Supreme Court's registry information portal, 1,305 people purchased their first collective residential property — including apartments, townhouses, multi-family homes and officetels — in Hwaseong's Dongtan district in May. That figure represents roughly 10 percent of the approximately 13,000 first-time buyers recorded across all of Gyeonggi Province that month.
The May tally marks a roughly 165 percent increase from January's 492 buyers, and a 272 percent jump from the 351 recorded in the same month last year. Monthly figures had moved in a more gradual pattern — 492 in January, 695 in February, 607 in March and 709 in April — before the sharp spike in May.
Analysts attribute the surge to two factors: Dongtan has so far been excluded from land transaction permit zones and regulated areas such as speculation-overheated districts and adjustment target zones, and news broke in April that Samsung Electronics and SK Hynix were paying out hundreds of millions of won in performance bonuses, drawing high-income young buyers into the market. SK Hynix paid each employee a bonus of up to 700 million won (about $461,000) this year, and Samsung Electronics' memory chip division employees are expected to receive a comparable amount. Samsung Electronics also agreed to raise its in-house home purchase loan ceiling to 500 million won.
Buyers in their 20s and 30s accounted for 830 of May's first-time purchasers in Dongtan — 64 percent of the total. Buyers in their 40s added another 330, or 25 percent, meaning those between 20 and 49 are driving the local market.
As demand concentrates in Dongtan, prices are rising and available listings are shrinking. The 84-square-meter unit at Dongtan's flagship complex, Dongtan Station Lotte Castle, traded last month for 2.08 billion won — crossing the 2 billion won threshold for the standard-size unit. Nearby Dongtan Station Sibeom Unam First Ville also set a record high of 1.6 billion won for the same unit size in May, narrowing the price gap with the area's top complex.
As of Wednesday, available apartment listings in Dongtan stood at 3,776 units, according to real estate platform Asil — down 42 percent from 6,479 three months ago, the steepest decline of any district in Gyeonggi Province.
As semiconductor bonus-fueled liquidity pours into Dongtan and pushes up apartment prices, calls for the area to be designated a land transaction permit zone or regulated area have grown louder. According to the Korea Real Estate Board, Dongtan apartment prices have risen a cumulative 5.11 percent from Feb. 1 — when Hwaseong's administrative reorganization took effect — through last week. Under the Housing Act, the government may consider designating an area an adjustment target zone if local home prices rise more than 1.3 times the inflation rate over the preceding three months, and a speculation-overheated district if they exceed 1.5 times that rate. Gyeonggi Province's consumer price inflation from March through May came in at 1.38 percent, meaning the quantitative threshold for a regulated area designation has been met.
The Ministry of Land, Infrastructure and Transport, the agency responsible for such designations, said it is not currently reviewing whether to designate Dongtan a land transaction permit zone or regulated area. Even so, the possibility of a designation remains open as prices continue to climb.
"There is nothing specifically being discussed or reviewed regarding a land transaction permit zone designation for Dongtan," a ministry official said. A separate official said the ministry is monitoring the market but that "it is still too early to discuss adding a regulated area designation." The official said May statistics would need to be reviewed once available, and that even if quantitative indicators are met, qualitative factors — such as whether the price increase is sustainable and whether it could spread to surrounding areas — would also need to be assessed before any decision is made.
hwshin@heraldcorp.com
