Searching for Apartments Under 100 Million Won with 'Acquisition Tax Exemption' Public Price in Pyeongtaek... Both Sales and Auctions Are 'Hot'

July Second Week Price Increase Rate 0.67%... Jumping to 3rd Nationwide
Investment Demand Concentrated in Complexes with Official Prices Below 100 Million Won
June Auction Average Winning Bid Rate 113.83%... Doubled in Half a Year

[Asia Economy Reporter Ryu Tae-min] Apartment prices in the Pyeongtaek area of Gyeonggi Province, which had remained relatively calm despite nationwide housing price increases last year, are soaring. Although the entry of Samsung Electronics' semiconductor plant and successive transportation benefits had only a minimal impact on price increases, the recent expansion of housing purchase enthusiasm to the outskirts of the Seoul metropolitan area has rapidly elevated this area as a new investment destination. The concentration of apartments with official prices under 100 million KRW, which can avoid acquisition tax surcharges for multi-homeowners, also appears to have influenced this trend.

According to the weekly apartment price trend report by the Korea Real Estate Board on the 20th, the apartment sales price increase rate in Pyeongtaek for the second week of July was 0.67%, ranking third highest nationwide. Apartment prices in Pyeongtaek began rising from the beginning of this year, increasing by 2.85% last month alone, with a cumulative increase of 11.87% in the first half of the year. This contrasts with last year's annual increase rate of 3.82%.

Pyeongtaek has been considered an undervalued area as housing prices did not rise significantly despite the establishment of Samsung Electronics' semiconductor plant in Godeok New Town and the connection of the Suseo High-Speed Rail (SRT) and KTX. Additionally, investment demand for apartments with official prices under 100 million KRW, which are exempt from acquisition tax surcharges for multi-homeowners, has greatly increased, contributing to the overall price rise.

Record-high transactions are also pouring in individual apartment complexes. For example, a 59.91㎡ (exclusive area) unit in Taepyeong Apartment, Godeok-myeon, near the central district of Godeok New Town, was traded on the 6th for 210 million KRW, setting a new record price. The price for this unit type was in the early 100 million KRW range at the beginning of this year but has doubled in half a year. Notably, this complex saw a total of 86 transactions from April to June, when investment demand began to surge.

The number of transactions by non-local buyers has also increased. According to Apartment Real Transaction Price (Asil), out of 6,630 housing transactions in Pyeongtaek from January to May this year, non-local buyers accounted for 2,033 cases (30.6%).

Auction Market Booms Amid Investment Frenzy... Average Winning Bid Rate Doubles to 113% in Half a Year

As the sales market heats up, demand is also pouring into court auctions. According to Gigi Auction, a court auction specialist company, the winning bid rate compared to the appraised price of Pyeongtaek apartments last month was 113.83%. This is more than double the 56.05% recorded in January this year.

Court auctions are also seeing concentrated demand for apartments with official prices under 100 million KRW. On the 12th of this month, 40 bidders participated in the auction for a 60㎡ unit in Taesan Green Apartment, Bijeon-dong, resulting in a winning bid 43% higher than the appraised price. Earlier, on the 21st of last month, 42 bidders competed for a 60㎡ unit in Pyeongtaek Apartment, Godeok-myeon, with the new owner decided at a price 60% above the appraised value.

Park Won-gap, Senior Real Estate Specialist at KB Kookmin Bank, said, “Recently, a rotation of investment has appeared in the outskirts of the Seoul metropolitan area, such as Pyeongtaek and Dongducheon, causing prices to surge rapidly. There is also significant demand from remote investors who are exempt from multi-homeowner regulations, so the price increase trend is likely to continue for the time being.”