Speculative Demand Fuels Price Surge in Guri, Giheung Before Regulations Tighten

Apartment prices in Guri and Giheung, South Korea, have accelerated their rise even after being designated as regulated areas. This phenomenon is largely attributed to a rush of speculative demand from "gap investors" who sought to purchase properties before stricter land transaction permit regulations came into force.

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In the first week of July, Guri City's apartment sales prices rose 0.64% compared to the previous week, an increase that was larger than the 0.30% in the week before the regulatory designation.

According to the Korea Real Estate Board's weekly apartment price trend report, Guri's apartment market saw a 0.64% price increase in the first week of July, a significant jump from the 0.30% rise in the week prior to designation. Similarly, Giheung district in Yongin experienced a 0.56% increase, up from 0.39% the previous week. In contrast, Dongtan in Hwaseong, which had previously seen the nation's highest cumulative price increase in the first half of the year, showed a slight slowdown, rising 1.29% compared to 1.46% the week before.

Real estate experts suggest that the delay between the designation of Guri and Giheung as regulated areas (July 30) and the enforcement of land transaction permit requirements (August 5) created a window for last-minute speculative investments. Dongtan, having already peaked, appears to be entering a cooling-off period after its rapid price appreciation.

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It appears that last-minute gap investment demand surged before being restricted by land transaction permit zones, leading to the price jump.

The "spillover effect" from regulated areas was also evident. Neighboring Namyangju saw its price increase from 0.16% to 0.21%, and Suwon's Gwonseon district also experienced a slight rise. Existing regulated areas like Gwangmyeong and Seongnam's Bundang district also continued their upward price trends, with Seoul's apartment prices also increasing by 0.30% week-on-week, driven by demand in areas with good transportation and school districts.

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Dongtan, which had the highest cumulative apartment sales price increase nationwide in the first half, appears to have passed its peak and is entering a period of consolidation after the regulatory designation.