Fueled by a semiconductor boom, apartment prices in Dongtan, Hwaseong, Gyeonggi Province, are surging rapidly. Asking prices are climbing so steeply that there are frequent cases of sellers canceling sales contracts even after paying penalties, prompting the saying that "you name the price."
According to Yonhap News on the 21st, a real estate agency in Cheonggye-dong, Dongtan City, said a homeowner recently canceled a contract for an apartment that had been sold last month for 1.6 billion won. The owner returned the 10% deposit to the buyer, paid 160 million won in damages, then raised the asking price by 300 million won and relisted the property for 1.9 billion won.
The trend also appears in the data. According to the actual transaction price system of the Ministry of Land, Infrastructure and Transport, there were a total of 82 cancellations of apartment sales contracts in Dongtan-gu last month, a 74% increase from the previous month (47). Cancellations accounted for 6.1% of all contracts (1,335). In particular, in Cheonggye-dong, which is dense with apartments near Dongtan Station, 28 out of 257 contracts in May, or 10.9%, were canceled.
As cancellations increase, disputes are arising between buyers who say they will pay the interim payment early to block cancellations and sellers who refuse. A real estate agent in Dongtan said, "Once the interim payment moves, cancellation is impossible, so there is intense back-and-forth between buyers who want to prepay the interim payment and sellers who want to refuse and cancel," adding, "In some cases, the deal is kept in place with the buyer handing the seller a set amount as consolation money."
Among Dongtan apartments, the flagship "Dongtan Station Lotte Castle" is showing the most pronounced price rise. An 84-square-meter unit in the complex changed hands on the 4th at a record 2.225 billion won, and current asking prices have shot up to 2.4 billion won. That is a jump of 400 million to 500 million won compared with actual trades a month ago (1.9 billion to 2 billion won).
The price surge is spreading to nearby mid- to low-priced complexes. Apartments around Lake Park, known as South Dongtan, are more than a 15-minute drive from Dongtan Station, but investment demand is flocking as construction of the Dongtan Urban Railroad (tram) linking to the station moves forward. A 106.94-square-meter unit at Song-dong's "Dongtan Linstraus The Lake" set a new high at 1.5 billion won on the 7th. That is 100 million to 130 million won higher than last month's actual trades.
A real estate agent in Song-dong said, "There are end users such as employees of Samsung Electronics and SK hynix, but because it is a non-regulated area where gap investing is possible, investment demand to buy with a jeonse tenant and rent it out has grown a lot."