Dongtan, Guri, Giheung Designated as Regulated Areas Amid Surging Housing Prices

[Anchor]

Hwaseong’s Dongtan District, Yongin’s Giheung District, and the city of Guri, where housing prices have recently soared, have been designated as regulated areas. With the tightening of loan regulations and their inclusion as land transaction permit zones, gap investments—buying homes with existing tenants—will become more difficult.

Reporter Lee Seonghun has the story.

[Reporter]

Dongtan, Guri, and Giheung, which have seen rapid spikes in housing prices, have ultimately been added to the government's list of regulated areas.

Starting today, July 1, these areas are designated as speculative overheated districts and adjustment target areas. From the 5th of next month, they will also be subject to land transaction permit zones, effectively placing them under triple regulations.

This move comes as the market overheated due to a balloon effect following their exclusion from regulated areas last year, compounded by high performance bonuses paid by semiconductor companies.

As of last week, apartment prices in Dongtan District have risen by 11.38% this year, marking the highest increase in the country, while Guri and Giheung District saw increases of 7.87% and 6.21%, respectively.

With this designation, the Loan-to-Value (LTV) ratio for those without homes will be reduced from the existing 70% to 40%, and new mortgage loans for existing homeowners will be effectively blocked.

Mortgage loan limits will also be capped at a maximum of 600 million won depending on the housing price.

In particular, the designation as land transaction permit zones imposes a mandatory residency requirement, making so-called gap investments—purchasing homes with tenants already in place—virtually impossible.

On the day before the designation took effect, real estate agencies saw intense last-minute maneuvering between buyers and sellers.

[Lee Jeong-heon / Real Estate Agent in Dongtan District, Hwaseong: Some sellers have lowered their asking prices, while others have withdrawn their properties. From a buyer's perspective, they see this as the last chance to buy a property with a tenant for a gap investment, so there are quite a lot of inquiries about those listings.]

The designation is expected to dampen trading for the time being and slow down the upward trend in prices.

However, some analysts argue that because market prices have already risen significantly, these measures are a case of too little, too late. They also suggest that it will not be easy to curb the upward pressure on housing prices, as real demand remains strong, bolstered by the high performance bonuses from semiconductor companies.

Concerns are also being raised about a potential balloon effect spreading to surrounding areas such as Namyangju and Suwon’s Gwonseon District.

[Kim Gyu-jung / Real Estate Analyst at Korea Investment & Securities: There are concerns that the balloon effect, where demand and capital flow into areas that remain unregulated, will continue to appear, and depending on conditions, there is a possibility that the designation of regulated areas could be expanded further in the future.]

The government stated that it will monitor market conditions to determine whether to designate additional regulated areas.

(Video Editing: Kim Jun-hee, VJ: Jeong Han-wook)
※ Please note: This article was translated by AI and may contain errors.