As home prices in Dongtan District, Hwaseong, Gyeonggi, rise sharply, the landscape of the real estate market in southern Gyeonggi is changing. Buoyed by expectations of a boom in the semiconductor industry and the opening effects of the Great Train Express (GTX)-A, the center of gravity in the southern Gyeonggi dwellings market, long led by Pangyo and Gwanggyo, is shifting to Dongtan.
According to the weekly apartment sale price index from the Korea Real Estate Board (REB) on the 11th, in the first district-by-district tally since Hwaseong was split into four districts, Dongtan District's cumulative apartment price growth this year was 5.11%. That surpasses the 5.00% rise in Yeongtong District, Suwon, which includes Gwanggyo New Town. During the same period, Hwaseong's overall growth rate was 3.14%. In effect, Dongtan District is driving the rise in Hwaseong home prices.
The recent upswing is even steeper. In the first week of June, Dongtan District's apartment price growth was tallied at 0.60%. Over the same period, Yeongtong District rose only 0.26%. Since a 0.20% increase at the end of April, Dongtan District has expanded its gains to 0.25%, 0.35%, 0.46%, 0.49% and 0.60%.
Until now, the regions representing the real estate market in southern Gyeonggi were Pangyo in Seongnam and Gwanggyo in Suwon. In particular, Yeongtong District, which includes Gwanggyo, has been cited as a leading residential area in southern metropolitan Seoul thanks to new town infrastructure, school districts and access to business districts. As recently as early this year, Yeongtong District was assessed as a key area leading the rise in home prices in southern Gyeonggi. But recently, as Dongtan District's growth rate has overtaken Yeongtong's, the market mood is shifting.
Changes are also appearing in actual transaction prices. According to the Ministry of Land, Infrastructure and Transport's actual transaction price disclosure system, an exclusive 84 square meters at "Dongtan Station Lotte Castle" in Yeoul-dong, Dongtan 2 New Town, traded last month for 2.08 billion won. That is higher than the recent transaction prices of 1.85 billion to 1.88 billion won for an exclusive 84 square meters at "Jayeon & Hillstate," regarded as a flagship complex in Gwanggyo.
Of course, it is hard to conclude that overall prices in Dongtan have surpassed Gwanggyo. Still, the fact that a flagship complex in Dongtan fetched a higher transaction price than a flagship complex in Gwanggyo is being seen as a symbolic sign of changing currents in the southern Gyeonggi dwellings market.
Transaction volume is also rising quickly. According to Real Estate R114, apartment transactions in Dongtan New Town totaled 2,283 in the first quarter, up 112% from the same period last year. In March this year, more than 60% of all apartment transactions in Hwaseong occurred in Dongtan District. Not only are prices rising, but actual buying interest is converging on Dongtan.
Listings are shrinking. According to Asil, a real estate big data platform, apartment listings in Dongtan District fell from 6,501 in early March this year to 3,733 in early this month. The drop comes to 42.6%. As homeowners, anticipating further price gains, pull properties from the market, the number of homes coming up for sale is quickly dwindling.
Asking prices in some complexes are jumping by hundreds of millions of won in a short period. For an exclusive 84 square meters at Dongtan Station Sibeom Hanwha Kum & Green, the asking price reportedly rose by more than 300 million won in just a few weeks. There are even reports in some complexes of attempts to cancel existing contracts. With buying interest strengthening and listings shrinking, analysts say a seller's market is taking shape.
The market cites the semiconductor industry boom as the key backdrop for Dongtan's strength. With proximity to Samsung Electronics' Hwaseong and Giheung business sites, combined with the opening of GTX-A and the push for the Dongtan tram, both end-user demand and investment demand are reportedly flowing in at the same time.
Nam Hyuk-woo of Woori Bank's Real Estate Research Institute said, "On expectations of a strong upturn in the semiconductor cycle, prices remain firm in the residential areas behind the southern Gyeonggi semiconductor belt," and added, "With Dongtan, which has a metropolitan transport network and livability conditions, leading the uptrend, buying interest is spreading not only around Dongtan Station but also to areas near Dongtan Lake Park, Dongtan 1 New Town and Byeongjeom."
However, the burden from the short-term surge is also growing. Given the rapid price gains, the possibility that the government could pull out additional regulatory measures cannot be ruled out. Nam said, "If the area is additionally designated as a regulated zone, there is potential for price corrections or a contraction in transactions, so it is necessary to watch for policy changes."