Semiconductor boom fuels Dongtan apartment prices; buyers rush before regulations

Apartment prices in Dongtan, Gyeonggi Province, and other southern Gyeonggi regions are experiencing a sharp rise. This surge is driven by strong expectations surrounding the booming semiconductor industry, which has created numerous jobs in the area, and the fact that these areas are not designated as regulated zones, unlike Seoul. This has led to an increase in demand from both local residents and speculative 'gap investors' who purchase properties with existing leases.

The Korea Real Estate Board reported that the weekly apartment price increase in Dongtan-gu, Hwaseong City, reached 1.98% in the second week of June (as of June 8), a threefold increase from the previous week's 0.60%. Since the administrative district reorganization, Dongtan-gu has recorded a cumulative price increase of 7.19% over the past four months, the highest nationwide. Real estate industry insiders suggest that rumors of impending regulatory zone designations are further intensifying the buying pressure.

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Since last month, rumors that the government's regulatory zone designation is imminent have led to a surge in demand from buyers rushing to purchase properties.

Local real estate agents report a significant increase in buyers rushing to purchase properties since last month due to speculation about upcoming regulations. Some popular apartment complexes are experiencing difficulties in finding available listings. For instance, a 59㎡ unit in Bando Ubora in Yeoul-dong, Dongtan-gu, was sold for 1.25 billion won (15th floor) on June 6, an increase of 220 million won compared to a 1.03 billion won sale (24th floor) in January.

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Some popular apartment complexes are experiencing difficulties in finding available listings.

Other semiconductor-hub regions are also seeing price increases. Pyeongtaek City, another beneficiary of the semiconductor boom, saw a 0.14% rise, marking its first increase in approximately two years and four months after a period of decline starting in the third week of February 2024. Bundang-gu in Seongnam City (0.62%) also experienced significant growth, particularly in areas like Gumi and Jeongja-dong, driven by development expectations. Jungwon-gu in Seongnam City (0.48%) and Dongangu in Anyang City (0.40%) also saw notable price hikes.

Meanwhile, Seoul's apartment sales prices rose by 0.27% this week, similar to the previous week's 0.25%. However, the increase in jeonse (long-term lease) prices accelerated to 0.32% from 0.29%, reaching the highest level in approximately 10 years and 8 months since the fourth week of October 2015. The Real Estate Board attributed this to sustained high jeonse demand relative to supply, with accumulated waiting demand in major complexes near subway stations and large residential areas leading to concluded contracts at higher prices. Among autonomous districts, Seongdong-gu (0.64%) saw significant jeonse price increases in major complexes in Haengdang-dong and Oksu-dong, followed by Dobong-gu (0.55%), Songpa-gu (0.53%), Gangbuk-gu (0.49%), Seongbuk-gu (0.48%), and Yeongdeungpo-gu (0.38%).

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Due to sustained high jeonse demand relative to supply, accumulated waiting demand in major complexes near subway stations and large residential areas led to concluded contracts at higher prices.