Semiconductor boom reshapes housing market; Dongtan's flagship complex overtakes Gwanggyo as chipmaker employees flood in; gap investment and balloon effect also driving surge
The semiconductor industry's upswing is reshaping South Korea's housing market. Apartment prices in Dongtan, Hwaseong, Gyeonggi Province — within commuting distance of major chipmakers — have posted the steepest weekly gains in the country and have now overtaken actual transaction prices in Gwanggyo, long favored for its closer proximity to Gangnam. Experts say buying demand has been driven partly by expectations of in-house loans and bonus payouts at nearby chipmakers such as SK Hynix and Samsung Electronics, but also by a "balloon effect" as buyers seek areas not subject to land transaction permit zone regulations.
According to the Ministry of Land, Infrastructure and Transport's real transaction price disclosure system, Dongtan's flagship complex — Dongtan Station Lotte Castle — recorded a sale of 2.225 billion won (approximately $1,460,000) for an 84-square-meter unit (exclusive use area, 33rd floor) on June 4, surpassing the all-time high for the same floor plan at Gwanggyo Jungheung S-Class in Suwon's Yeongtong-gu, which sold for 1.83 billion won (13th floor).
Even a smaller 65-square-meter unit at the same Dongtan Station Lotte Castle complex traded at 1.647 billion won (32nd floor) in April, topping the 1.55 billion won paid a month later for a larger 74-square-meter unit at Gwanggyo Central View (13th floor).
Market observers consider this reversal remarkable. Gwanggyo had long ranked second only to Bundang among southern Gyeonggi Province neighborhoods for apartment prices, thanks to its location on the Suin-Bundang Line connecting to Gangnam. The commute from Gwanggyo Central Station to Pangyo Station takes about 19 minutes and to Gangnam Station roughly 33 minutes, and easy access to Samsung Digital City in Suwon's Maetan-dong had historically drawn Samsung employees and Gangnam-bound commuters to the area.
Recently, however, young semiconductor workers who have benefited from the boom at Samsung Electronics and SK Hynix have been flocking to Dongtan, triggering the price reversal. High-earning employees at nearby Samsung Electronics, ASML, Hyundai and Kia have been snapping up homes there. Hwaseong, the city that encompasses Dongtan, has an average resident age of 40.0 this year, earning it a reputation as a "young city." Anticipation over the opening of the Seoul Metropolitan Express Railway (GTX) line has also fueled demand.
Nam Hyeok-woo, a real estate researcher at Woori Bank, said the two areas are broadly comparable in terms of job proximity, apartment density and livability — Gwanggyo has a Galleria department store while Dongtan has a Lotte department store. "The one difference is that Dongtan gets an additional GTX line," he said.
Asking prices are reflecting this trend even more sharply. At Dongtan Station Lotte Castle, no 84-square-meter units are currently listed for sale. Asking prices for mid-to-large units of 102 square meters and above have reached as high as 2.7 billion won. Some larger units at Dongtan Station Sibeom Hanwha Kkum-e-Geurin Prestige are listed at 3 billion won. Gwanggyo asking prices remain lower: at Jayeon & Hillstate, a 1,764-unit complex near Gwanggyo Central Station, 32 units of 84 square meters are on the market with asking prices ranging from 1.75 billion won to 2.3 billion won.
Experts say that while semiconductor bonuses are concentrating buying power in certain areas, the more fundamental driver of Dongtan's price surge is the balloon effect. Unlike Gwanggyo, which is designated a land transaction permit zone and carries an owner-occupancy requirement, Dongtan allows gap investment — purchasing a unit with an existing tenant in place.
Dongtan's overtaking of Gwanggyo prices coincides precisely with the period when all of Seoul and 12 locations in Gyeonggi Province were placed under land transaction permit zone restrictions. On Oct. 3 last year, an 84-square-meter unit at Dongtan Station Lotte Castle sold for 1.53 billion won on the same day a comparable unit at Gwanggyo Jungheung S-Class sold for 1.61 billion won.
After the measures took effect, a unit at Dongtan Station Lotte Castle sold for 1.75 billion won (44th floor) in November, overtaking the 1.64 billion won (18th floor) fetched by Gwanggyo Jungheung S-Class that same month.
"There were quite a few cases of buyers from outside the region purchasing units with tenants in place, betting that Dongtan prices would rise further," said a real estate agent near Dongtan Station. "There are also residents within Dongtan who want to upgrade to a different unit but cannot move yet, so they buy with a tenant first."
Lending conditions have also played a role. Because Dongtan is not designated a speculative overheating zone or other regulated area, buyers can borrow up to 70 percent of the purchase price under loan-to-value ratio rules. Given the area's relatively young average age of 39.5 and concentration of high earners, various first-time buyer and other loan programs were likely widely used.
According to the Court Registry Information Plaza, the loan index for collective buildings — apartments, officetels and commercial units — in Dongtan-gu, Hwaseong recorded an average of 71.55 in May. The loan index measures the ratio of mortgage collateral set against the transaction price; a reading above 70 means buyers financed more than 70 percent of the purchase price through loans.
Nam, the Woori Bank researcher, noted that actual transaction prices near Dongtan Station now exceed those of the top apartments near Cheongnyangni in Seoul along the same GTX line. "With the possibility of additional regulations such as land transaction permit zone designation being raised, there remains a chance that prices could fall back toward their fundamental value," he said.
According to the Korea Real Estate Board, Dongtan posted a weekly apartment price gain of 1.98 percent in the second week of June (as of June 8), the highest in the country. That figure dwarfs the 0.26 percent recorded in Suwon's Yeongtong-gu — which includes Gwanggyo — and the 0.2 percent in Yongin's Suji-gu, and is more than four times the 0.42 percent gain posted by Gangseo-gu, Seoul's top-performing district.
By Hong Seung-hee
hss@heraldcorp.com
