[2·20 Real Estate Measures] 'Suwon, Anyang, Uiwang' Next Location... Already Mentioned as the '20th Candidate Site'

Photo by Mun Ho-nam munonam@

[Asia Economy Reporter Kim Yuri] Although the government has unveiled the '19th real estate measure,' the market is already turning its eyes to the 'next target.' This is a typical balloon effect where regulations intensify in certain areas, prompting attention to nearby non-regulated regions. Most major non-regulated areas in the Gyeonggi region, such as Ansan, Siheung, Hwaseong (An·Si·Seong), and Gimpo, Bucheon, Geomdan (Gim·Bu·Geom), are being mentioned. However, the government has also stated that it will closely monitor areas excluded from this regulation, leading to speculation that a '20th measure' might be announced after the general elections in April.

On the 20th, the government announced the addition of Yeongtong, Gwonseon, and Jangan districts in Suwon, Manan district in Anyang, and Uiwang as adjusted target areas. From now on, when taking out a mortgage loan in these areas, a loan-to-value ratio (LTV) of 50% and a debt-to-income ratio (DTI) of 50% will apply. For houses priced over 900 million KRW, an LTV of 30% will apply to the amount exceeding 900 million KRW. Enhanced regulations such as increased capital gains tax on multi-homeowners, exclusion from long-term holding special deductions, strengthened resale restrictions upon winning subscription, and expanded application of the point system will be enforced.

The government introduced these measures after monitoring the entire Gyeonggi region, including Suwon, Yongin, and Seongnam (collectively known as 'Su·Yong·Seong'), where house prices have surged due to the balloon effect of the December 16 real estate measures last year. The market regards this as 'already anticipated' and is now talking about other nearby non-regulated areas. It is expected that the overflowing liquidity in the market will seek other opportunities and gaps. Non-regulated areas with transportation benefits and regions with planned new supply or move-ins, such as Ansan, Siheung, Hwaseong ('An·Si·Seong') and Gimpo, Bucheon, Geomdan ('Gim·Bu·Geom'), are being mentioned.

Experts point out that such 'whack-a-mole' style regulations will only create a second Su·Yong·Seong. Professor Kwon Dae-jung of Myongji University's Department of Real Estate said, "the designation of areas is rather insufficient," emphasizing, "Among the areas showing balloon effects, Paldal-gu in Suwon and Suji and Giheung districts in Yongin should be upgraded to speculative overheating districts, and proactive measures are needed for Siheung, Osan, Pyeongtaek, Guri, and Namyangju as well." Seo Jin-hyung, president of the Korea Real Estate Society (professor at Gyeongin Women's University) also diagnosed that "balloon effects will occur in surrounding areas or other regions such as Incheon and Bucheon."

Experts point out that fundamental measures, such as securing alternative investment destinations for the overflowing liquidity due to the low-interest rate environment, must accompany these regulations. Yang Ji-young, director of Yang Ji-young R&C Research Institute, emphasized, "In a situation where there are not many places for funds to go, investors still have the expectation that 'real estate will rise' based on past learning effects," adding, "The fundamental causes such as supply shortages must be resolved."