Housing prices in the chip-manufacturing belt south of Seoul are climbing sharply, deepening instability in the greater Seoul property market, even as apartment prices in the capital extended an 88-week run of gains with a second straight week of acceleration. Prices jumped in Suwon and Hwaseong, home to Samsung Electronics plants, and in Seongnam's Bundang district, which has drawn buyers trading up to pricier neighborhoods. The gains are spilling over into Gunpo and Uiwang, areas outside government-designated regulated zones.
Apartment prices in Gyeonggi Province rose 0.26% in the second week of October, as of the 12th, up from 0.18% the previous week, according to the Korea Real Estate Board on the 15th. Bundang accelerated to 0.79% from 0.56%, while Gunpo surged to 0.72% from 0.27%. Suwon's Yeongtong district rose 0.69%, Hwaseong's Dongtan district 0.66%, Gwangmyeong 0.62% and Uiwang 0.60%. Dongtan has gained 20.14% so far this year.
Seoul apartment prices rose 0.16%, marking an 88th consecutive week of gains and a record streak. The three Gangnam-area districts continued to decline, but Yongsan returned to positive territory with a 0.03% gain after two weeks of losses, and Jungnang, Seongbuk and Seodaemun posted increases in the 0.4% range.
Nam Hyuk-woo, a researcher at Woori Bank's real estate research institute, said the price gains that began in Suwon, where Samsung Electronics is headquartered, have spread to neighboring areas, pushing owner-occupier buyers priced out of those markets toward Gunpo and Uiwang. "In areas outside regulated zones such as Gunpo, we are also seeing buyers in their 20s and 30s who do not own a home and lack the funds purchasing properties with a tenant's lease deposit in place," he said.
Spillover Reaches Unregulated Areas, Stirring Hwaseong's Byeongjeom
Apartment prices across southern Gyeonggi Province are rising steeply on the back of the semiconductor boom. Prices remain strong in residential areas serving the chip plants in Suwon and Hwaseong, which fall directly within reach of Samsung Electronics' in-house housing loans and a planned large special bonus payout. Buyers priced out of those markets are moving to adjacent unregulated areas including Gunpo, Uiwang and Byeongjeom, widening the spillover. Hwaseong's Dongtan district has gained more than 20% since separate statistics for the area began in February of this year.
Gyeonggi Province apartment sale prices rose 0.26% from the previous week in the second week of October, as of the 12th, according to weekly apartment price data released by the Korea Real Estate Board on the 15th. That was 0.08 percentage points wider than the previous week's 0.18% and well above Seoul's 0.16%.
Gains were steepest near Samsung Electronics facilities. Suwon's Yeongtong district rose 0.69%, up from 0.62% a week earlier, while Hwaseong's Dongtan district doubled its pace to 0.66% from 0.33%. Dongtan has risen 20.14% this year, climbing more than 20% since separate statistics began following an administrative boundary change in February. Yeongtong has gained 16.19% this year.
The gains are spreading to neighboring areas. As prices in Suwon and Dongtan rise quickly, owner-occupier buyers who do not own a home and feel priced out are turning to relatively cheaper unregulated areas such as Gunpo and Hwaseong's Byeongjeom. Those areas offer easier access to mortgage borrowing than regulated zones, and some complexes show a narrow gap between lease deposits and sale prices, drawing attention as alternatives for buyers in their 20s and 30s with limited funds.
Record prices are also being set in actual transactions. An 84-square-meter unit at the Sejong complex in Gunpo's Sanbon neighborhood sold for 848 million won on the 23rd of last month, 48 million won above the previous high of 800 million won, according to the Ministry of Land, Infrastructure and Transport's transaction price disclosure system. An 84-square-meter unit at Byeongjeom Station SK View in Hwaseong's Byeongjeom neighborhood sold for 550 million won on the 16th of last month, exceeding the previous high by 40 million won. An 84-square-meter unit at Woomilin Cent Foret Complex 1 in Annyeong neighborhood sold for 517 million won on the 3rd of this month, also a record.
Samsung Electronics began last month offering employees who do not own a home up to 500 million won in home purchase loans at an annual rate of 1.5%, placing these areas within a price range where purchases using the in-house loans are feasible. Apartment listings for sale in Gunpo fell 7.1% over the past month to 2,285 from 2,459, the steepest decline in Gyeonggi Province, according to property data platform Asil. Listings in Hwaseong's Byeongjeom area fell 5.0% to 1,385 from 1,457.
Buyers who already own homes are moving to sought-after southern Gyeonggi neighborhoods such as Bundang and Yongin's Suji district. As prices rise in Suwon and Dongtan, they are selling their existing homes and trading up to more desirable areas. Seongnam's Bundang district rose 0.79% this week, the steepest gain in Gyeonggi Province, widening by 0.23 percentage points from 0.56% a week earlier and bringing its gain this year to 16.01%. Yongin's Suji district accelerated to 0.34% from 0.18%. In first-generation new towns such as Bundang and Pyeongchon, expectations tied to redevelopment projects are also fueling demand.
The rental market shows similar strength in major southern Gyeonggi areas. Apartment lease prices rose 0.44% in Suwon's Yeongtong district, 0.40% in Hwaseong's Dongtan district and 0.38% in Yongin's Giheung district. Dongtan Station Lotte Castle, a 940-unit complex considered the area's flagship, currently has only three units listed for lease. Asking lease prices for a 65-square-meter unit reach 700 million won. Gwanggyo Jungheung S-Class in Gwanggyo new town has just 12 units listed for lease out of 2,231.
Seoul apartment prices also accelerated for a second straight week. Prices in the capital rose 0.16%, up from 0.12% a week earlier, for an 88th consecutive weekly gain. Yongsan rebounded with a 0.03% gain after two weeks of declines. Gains were pronounced in northern Seoul, with Jungnang up 0.42%, Seongbuk 0.41% and Seodaemun 0.40%. The three Gangnam-area districts continued to fall, with Gangnam down 0.35%, Seocho 0.27% and Songpa 0.21%. Nam of Woori Bank said the inflow of liquidity that began in Suwon could strengthen downward price rigidity in major greater Seoul areas over the medium to long term.