As home prices and jeonse prices in Seoul jump, demand for buying a home is shifting to non-regulated areas in Gyeonggi Province. Following Dongtan District in Hwaseong in southern Gyeonggi, record-high transaction prices are also being reported in Guri and Namyangju, which have good access to Seoul. As so-called "balloon effect" buying concentrates in areas with relatively lighter loan regulations and primary residence requirements, the market is even discussing the possibility of expanding regulated zones.
On the 25th, according to the Ministry of Land, Infrastructure and Transport's actual transaction price disclosure system, an 84-square-meter unit in e-Pyeonhansesang Inchang Urban Fore in Inchang-dong, Guri, was transacted for 1.35 billion won on the 3rd, setting a record high. An 84-square-meter unit in Hillstate Guri Station in Sutaek-dong also changed hands for 1.44 billion won last month, setting a new all-time high. In this complex, the same size was transacted for 1.05 billion won in Jul. last year, meaning the price rose by nearly 400 million won in one year.
Transactions are also increasing rapidly. From January to May this year, apartment sale transactions in Guri totaled 2,129, about three times the 731 in the same period last year. An official at a real estate agency in Inchang-dong said, "Inquiries from newlyweds and buyers in their 30s who commute to Jamsil or Gangnam in Seoul have increased noticeably," and added, "Rather than maintaining a jeonse in Seoul, many want to switch to a purchase in Guri."
Guri's strength is its access to Seoul. Inchang-dong is considered one of the most preferred areas within Guri because it includes Guri Station and Donggureung Station on Subway Line 8. It takes around 20 minutes by subway from Guri Station to Jamsil Station and around 40 minutes to Gangnam Station. For buyers burdened by higher jeonse prices in Seoul, it is an area where they can switch to buying without significantly increasing commute time.
Namyangju, which borders Guri, is also clearly on the rise. An 84-square-meter unit in Dasan Xi Ivy Place in Dasan-dong was transacted for 1.2 billion won last month, and a 110-square-meter unit sold for 1.4 billion won this month, setting record highs. An 84-square-meter unit in Dasan e-Pyeonhansesang Xi in Dasan-dong was also transacted for 1.095 billion won this month. Considering that the same size transacted for 898 million won in May last year, the price has risen by nearly 200 million won in about a year.
Namyangju benefits from bordering Seoul and overlapping transport and development positives. There are expectations for the opening of the GTX (Great Train eXpress) lines, and large-scale supply of dwellings is underway in areas such as Wangsuk, Yangjeong Station area, and Jinjeop 2 District. The Dasan New Town area already has living infrastructure in place and offers good access to eastern Seoul, drawing strong interest from young end users.
Experts see this as the result of regulations concentrating on parts of Seoul and Gyeonggi, pushing demand to non-regulated areas. After the Oct. 15 real estate measures last year grouped all of Seoul and parts of Gyeonggi as regulated areas, buying demand strengthened in places that avoided regulation. Non-regulated areas have relatively higher loan limits than regulated areas, and where it is not a land transaction permit zone, transactions that purchase with a jeonse tenant in place are also possible, easing funding burdens.
Seo Jin-hyeong, a professor in the Department of Real Estate Law and Administration at Kwangwoon University, said, "Government regulations have raised the bar for buying in Seoul and some areas of Gyeonggi, leading to a balloon effect of demand moving to non-regulated areas," and added, "With concerns about supply shortages and expectations of rising home prices overlapping, even end users in their 20s and 30s are moving to areas where more loans are available."
Market attention is shifting to whether areas will be designated as regulated. According to monthly dwelling price trend statistics from the Korea Real Estate Board (REB), among non-regulated areas in the Seoul metropolitan area, Dongtan District in Hwaseong, Guri, and Giheung District in Yongin are known to have recently met the quantitative requirements for designation as regulated areas. Areas subject to adjustment can be designated if the dwelling price increase rate over the past three months exceeds 1.3 times the consumer price inflation rate of the corresponding province or city, and speculative overheat districts can be designated if the home price increase rate is significantly higher than inflation. However, the final designation is decided by the Housing Policy Deliberation Committee after comprehensively reviewing subscription competition, transaction volume, dwelling supply rate, and market conditions.
A real estate industry official said, "The more the possibility of designation as a regulated area is discussed, the more last-minute demand can rush in," and added, "However, while tighter restrictions can suppress purchase demand, side effects such as a decrease in jeonse listings or renewed increases in surrounding areas also need to be considered."