'Demand simply moves to unregulated areas to avoid restrictions'

'Government saw balloon effect coming, then acted months too late'

'Housing supply needed near semiconductor belt, GTX corridors'

Reform Party floor leader Cheon Ha-ram speaks at a supreme council meeting at the National Assembly on Monday. At left is party leader Lee Jun-seok. [Yonhap]
Reform Party floor leader Cheon Ha-ram speaks at a supreme council meeting at the National Assembly on Monday. At left is party leader Lee Jun-seok. [Yonhap]

The Reform Party on Tuesday urged the government to shift its real estate policy toward expanding housing supply, criticizing its decision to designate Hwaseong Dongtan, Yongin Giheung and Guri as additional land transaction permit zones as "the balloon bursting at the seams."

Party spokesperson Cha Ho said in a statement that home prices in the three areas had risen 3.85 percent, 2.57 percent and 3.53 percent respectively over the past three months — three to four times the Gyeonggi Province average of 0.81 percent. "The numbers alone may seem to justify the regulation," he said.

However, Cha said the recent price surge was itself a "balloon effect" caused by the government's existing restrictions. "When the Oct. 15 measures last year swept all of Seoul and 12 areas in Gyeonggi Province into permit zones at once, demand simply migrated to unregulated areas," he said. "The heat spread to Dongtan and Giheung, where semiconductor bonuses and GTX development news overlapped, and to Guri, which borders Seoul."

He added that the government had already flagged Dongtan and Guri for abnormal transaction probes during last year's Oct. 15 measures. "The government anticipated the balloon effect but did nothing for months, only to act belatedly — a textbook case of closing the barn door after the horse has bolted," he said.

Cha said the additional designations would not fundamentally cool the overheated market. "Blocking purchases only pushes demand to the next unregulated area," he said. "Anyang's Manan district and Gimpo are already being mentioned. Only the location of the balloon changes."

He also warned that curbing gap investment could reduce the supply of jeonse and monthly rent units, as landlords who buy properties with existing jeonse deposits and rent them out would pull back. "Jeonse prices in Dongtan have risen 4.26 percent over the past three months, already outpacing the sale price increase," he said. "If transactions are restricted on top of that, the burden on tenants will grow even heavier."

As an alternative, the Reform Party proposed proactively expanding housing supply near the semiconductor industry belt and areas set to benefit from GTX lines. Cha urged the government to pre-supply housing close to workplaces along the semiconductor belt and to finalize supply plans for GTX-adjacent areas before the lines open, to leave less room for speculative demand. "Instead of blocking transactions, policy should protect both end-users and the rental market to head off a jeonse shortage," he said.

He added that home prices cannot be held down by force. "Press down on one spot and it will always push up somewhere else," he said. "Rather than trying to beat the market with administrative power, the government should let the market's needs inform its administration."


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