'Up 500 million won in a month': Contract cancellations surge in Dongtan as home prices spike

Contract cancellations are surging in the Dongtan new town apartment market in Hwaseong, which has been running hot on expectations of a semiconductor boom.

After Samsung Electronics and its union reached an agreement on large performance bonuses and other benefits at the end of last month, home prices climbed sharply — prompting sellers who had listed their properties at relatively low prices to void contracts, absorb the penalty, and relist at higher prices.

Buying activity in the Dongtan apartment market has cooled somewhat amid talk of a possible regulated-zone designation, but demand from investors seeking last-minute gap investment opportunities before any restrictions take effect remains strong.

According to the Ministry of Land, Infrastructure and Transport's actual transaction price disclosure system, the number of apartment sale contracts recorded in Dongtan District, Hwaseong, in May reached 1,355 as of Sunday.

That figure could climb further, as the reporting deadline for May transactions runs through the end of this month. It has already surpassed the previous month's total of 1,001 transactions and exceeds the 1,121 deals recorded in November last year, when a balloon effect emerged after Dongtan was excluded from the list of regulated zones under the government's Oct. 15 measures.

Contract cancellations have also risen sharply. A total of 82 cancellations have been confirmed for May so far, accounting for 6.1 percent of all contracts — a 74 percent increase from the 47 cancellations recorded the previous month.

The spike is widely attributed to a sharp rise in home prices following the May 27 agreement between Samsung Electronics and its union on expanded semiconductor performance bonuses and 500 million won (about $328,000) in housing loan support. Sellers who had signed contracts at relatively low prices are increasingly demanding to cancel those deals.

A real estate agent in Cheongye-dong, Dongtan, described one such case: a seller who had agreed to sell for 1.6 billion won returned the 10 percent deposit to the buyer, paid an additional 160 million won in penalty, and relisted the property at 1.9 billion won — 300 million won higher. "Even after paying the double-deposit penalty, the seller still comes out 140 million won ahead, which is why cancellations are more common than usual," the agent said.

According to local real estate agents, market prices at major apartment complexes near Dongtan Station rose by an average of 300 million to 400 million won in just two weeks following the Samsung Electronics bonus agreement.

The 84-square-meter exclusive-use unit at Dongtan Station Lotte Castle — one of the most prominent complexes in the Dongtan transit-oriented area — set a new record when it sold for 2.225 billion won on June 4, and asking prices have since climbed to 2.4 billion won.

A month ago, actual transaction prices for the same unit type were in the 1.9 billion to 2 billion won range, meaning prices have risen by roughly 400 million to 500 million won in a short period.

Cheongye-dong recorded the highest cancellation rate. Of 257 contracts signed in May, 28 were canceled — a rate of 10.9 percent, nearly double Dongtan's overall average of 6.1 percent.

Yeoul-dong, where Dongtan Station Lotte Castle is located, ranked second, with 12 of 159 May contracts canceled.

The rise in cancellations is fueling tensions between buyers and sellers.

"Because a contract cannot be canceled once interim payments have been exchanged, there's a fierce standoff between buyers who want to make those payments early and sellers who refuse and want to void the deal," one Dongtan real estate agent said. "In some cases, the contract is kept in place but the buyer ends up paying the seller a consolation sum to settle the dispute."

The price surge that began with newly built apartments near Dongtan Station is spreading to surrounding areas.

The lake park area known as South Dongtan is also drawing investor interest, buoyed by expectations surrounding the planned Dongtan urban railway tram development.

An exclusive-use unit of 106.94 square meters at Dongtan Linstraus the Lake in Song-dong set a new record price when it sold for 1.5 billion won on June 7 — roughly 100 million to 130 million won above the previous month's actual transaction price.

"There are genuine end-users, including employees from Samsung Electronics and SK Hynix, but gap investment demand has grown significantly because the area is unregulated and investors can take on jeonse tenants," a real estate agent in Song-dong said.

The government is currently reviewing plans to designate areas with sharply rising home prices — including Dongtan and other unregulated parts of the greater Seoul metropolitan area — as regulated zones and land transaction permit zones.

Market sentiment is divided as a result. End-users, facing higher prices, are taking a wait-and-see approach in hopes that the market will stabilize once regulations are in place.

Investors, meanwhile, are pressing ahead with purchases before any land transaction permit zone designation, and local agents say foot traffic at brokerages has continued even on weekends.

Some observers are questioning whether the government has already missed its window to act.

"When the mood turned clearly overheated after the bonus expansion, the government should have moved immediately to designate the area as regulated," one Dongtan real estate agent said. "Instead, prices rose to unprecedented levels while the government and politicians dragged their feet with local elections in mind. Even if regulated and land transaction permit zones are designated, gap investment demand may fall, but it's unclear how much prices will actually drop given the windfall from semiconductor workers' large bonuses."

Experts advise that areas where prices have surged sharply in a short time warrant close attention to the possibility of declining transaction volumes and price corrections. Analysts say both end-users and investors should weigh the full range of market variables — including whether regulated zone designations go ahead, the direction of interest rates, and shifts in the semiconductor industry — rather than making decisions based solely on the recent upswing.

고립된 이스라엘의 탈출구는 인도였다…급부상한 新안보축[디브리핑]

https://biz.heraldcorp.com/article/10782700