As Dongtan Tightens, Homebuyers Shift to Osan, Byeongjeom and Seoul

Dongtan residents sharply reduced their home purchases inside the district after the government imposed tighter real estate rules, but their demand did not disappear. It moved outward, toward nearby unregulated areas, leading Gyeonggi housing districts and Seoul.

An analysis of ownership-transfer registration applications found that Dongtan residents bought 1,101 properties per month on average from February through June. The figure fell to 719 in July and 781 in August, declines of 34.7% and 29.1%, respectively.

Dongtan’s share of all purchases by residents across the wider capital region also dropped, from an average of 72.1% before the restrictions to 60.2% in July and 62.5% in August. At the same time, the share of purchases outside Dongtan, including elsewhere in Gyeonggi and Seoul, rose from 27.9% to 39.8% in July and 37.5% in August.

The government designated Dongtan as both a speculative overheating zone and an adjustment target area in July. It also placed the district under land-transaction permit rules, tightening restrictions on loans, housing subscriptions and resale. Asking prices near Dongtan Station, however, remained around 2 billion won, with expectations surrounding the GTX-A rail line and Samsung Electronics’ housing-loan support helping sustain prices.

Purchases in Osan and Byeongjeom rose from a monthly average of 65 before the restrictions to 133 in July, an increase of 103.4%. Demand also increased in Yongin’s Suji district and Suwon’s Yeongtong district, while purchases in Seoul rose from an average of 87 to 200 in July and 115 in August. Kim In-man, head of the Kim In-man Real Estate Economic Research Institute, said the measures appeared to have slowed price growth and transactions while shifting demand to neighboring areas and higher-tier markets.

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The designation of the regulated area appears to have curbed the pace of home-price increases and transaction volumes, while also producing a balloon effect as demand moved to nearby areas and a reverse balloon effect as buyers shifted to higher-tier areas facing similar restrictions.