[2·20 Real Estate Measures] Why Anyang Manan and Uiwang Were Designated as Adjustment Areas

A panoramic view of an apartment complex in the Seoul metropolitan area.

[Asia Economy Reporter Choi Dong-hyun] The government has designated five areas in the Seoul metropolitan area?Yeongtong, Gwonseon, and Jangan districts in Suwon, Manan district in Anyang, and Uiwang city?as regulated areas. Notably, the scope of targeted regulations has expanded beyond the recently spotlighted "Suyongseong" (Suwon, Yongin, Seongnam) area, drawing attention to the reasons behind this move.

On the 20th, the Ministry of Land, Infrastructure and Transport held a Housing Policy Deliberation Committee meeting and designated Yeongtong, Gwonseon, and Jangan districts in Suwon, Manan district in Anyang, and Uiwang city as regulated areas in the Seoul metropolitan region. This is the 19th real estate measure issued by the current government, coming just over two months after the December 16th measures announced at the end of last year. The Ministry also tightened mortgage loan requirements within these regulated areas to curb speculative demand in the real estate market.

What stands out in this round of regulations is the inclusion of Manan district in Anyang and Uiwang city, which had received relatively less attention compared to Suwon, where prices surged sharply recently. Regulated areas are designated if, over the past three months, the housing price increase rate exceeds 1.3 times the consumer price inflation rate of the respective city or province, and if any of the following conditions are met: ▲the subscription competition rate for housing exceeds 5:1 over the past two months, ▲the volume of pre-sale rights transactions in the past three months has increased by more than 30% compared to the same period last year, or ▲the housing supply rate or owner-occupied housing ratio in the city or province is below the national average. Additionally, if the Housing Policy Deliberation Committee under the Ministry of Land, Infrastructure and Transport judges that the housing pre-sale market is overheated or at risk of overheating, the area can be designated as regulated. In regulated areas, mortgage loan-to-value ratios are reduced, capital gains taxes are increased, and restrictions on pre-sale rights transactions are imposed.

The apartment price increase rates in Manan district of Anyang and Uiwang city have shown a sharp rise, significantly exceeding the Seoul metropolitan area increase rate (1.12%) in just over two months since the December 16th measures, up to the 10th of this month. Manan district rose by 2.43%, and Uiwang city by 1.93%. According to the Korea Real Estate Board and Statistics Korea, the consumer price inflation rate in Gyeonggi Province over the past three months from October last year to January this year was only 0.33%. The pinpoint regulation of these areas is understood to be intended to preemptively block the so-called "balloon effect" of regulations, which many experts have pointed out, alongside the high price increase trend. Manan district in Anyang and Uiwang city are located in the southwestern part of Gyeonggi Province adjacent to Suwon, where price sensitivity between regions is high.

A Ministry of Land, Infrastructure and Transport official explained, "In the case of Manan district in Anyang, the 'Wolgot-Pangyo Line,' and in Uiwang city, the 'Indeokwon-Dongtan Line' and 'Wolgot-Pangyo Line' are expected to improve the metropolitan transportation network, spreading additional price increase expectations throughout the market," adding, "There is concern that speculative demand for profit realization may increase, which is why these areas were included as regulated areas."