Three non-regulated areas in Gyeonggi Province, including Dongtan-gu in Hwaseong, which have recently seen a sharp rise in housing prices, have been newly designated as regulated areas and land transaction permit zones.
The Ministry of Land, Infrastructure and Transport announced today (June 30) that it has decided to designate Dongtan-gu in Hwaseong, Giheung-gu in Yongin, and Guri as regulated areas (adjustment target areas and speculative areas) following a resolution by the Residential Policy Deliberation Committee on June 29.
Dongtan-gu and Giheung-gu are seeing price increases due to expectations of a housing market boom driven by the semiconductor industry and favorable factors such as the opening of the Great Train Express (GTX)-A line. Guri is experiencing price hikes due to its advantage as a station-adjacent area near Seoul.
According to the Korea Real Estate Board, as of the fourth week of June (June 22), the cumulative increase in apartment sale prices in Dongtan-gu this year was 11.38 percent, the highest in the country.
Guri, which saw a 0.09 percent decline during the same period last year, rose by 7.87 percent, while Giheung-gu, which recorded a -0.29 percent change during the same period last year, saw a 6.21 percent increase this year.
The Ministry of Land, Infrastructure and Transport explained that these regions were additionally designated as regulated areas to block speculative buying, protect actual residents, and respond to the overheating of the housing market.
Gyeonggi Province also designated these three regions as land transaction permit zones through its Urban Planning Committee, requiring approval from the competent authority when trading apartments.
The effect of the regulated area designation begins on July 1.
The land transaction permit zone designation will be in effect from July 5 to December 31, 2027.
In regulated areas, the Loan-to-Value (LTV) ratio limit for non-homeowners, including those with one home subject to disposal conditions, will be tightened from the previous 70 percent to 40 percent.
The mortgage loan limit is differentiated by price: 600 million won for homes valued at 1.5 billion won or less, 400 million won for homes over 1.5 billion won to 2.5 billion won, and 200 million won for homes exceeding 2.5 billion won.
Homeowners are subject to an LTV of 0 percent and cannot receive loans.
In addition, there are disadvantages such as restrictions on the resale of pre-sale rights and limitations on re-winning housing subscriptions. Multiple-home owners face heavy acquisition and capital gains taxes, and there are restrictions on the transfer of union member status in redevelopment projects.
When designated as a land transaction permit zone, a two-year mandatory residency requirement is imposed from the date of acquisition when purchasing a home in the area. Violations may result in the imposition of enforcement fines or the cancellation of the permit, effectively blocking gap investments (purchasing homes with existing jeonse leases).
Previously, through the October 15 measures last year, all of Seoul (25 autonomous districts) and 12 areas in Gyeonggi Province (Gwacheon, Gwangmyeong, Bundang-gu, Sujeong-gu, and Jungwon-gu in Seongnam, Yeongtong-gu, Jangan-gu, and Paldal-gu in Suwon, Dongan-gu in Anyang, Suji-gu in Yongin, Uiwang, and Hanam) were designated as regulated areas and land transaction permit zones.
With this additional designation, the number of such areas in the Gyeonggi region has increased to 15.
The Ministry of Land, Infrastructure and Transport stated that along with the new designation of regulated areas, it will strengthen monitoring of areas with rising housing prices, including strict responses to illegal activities that disturb the real estate market.
Furthermore, the government plans to focus on housing supply, including the housing supply expansion plan announced on September 7 last year, the plan to supply 60,000 units in the Seoul metropolitan area announced on January 29 this year, and the expansion of purchased rental housing and non-apartment supply announced last month.
(Photo: Yonhap News)