Non-Regulated Areas in the Metropolitan Region Emerge as Policy Beneficiaries
Past Trends Suggest a Possible Repeat
Subscription Demand Surges Due to Various Advantages, Boosting Local Reputation and Driving Up Prices
In the metropolitan area housing market, non-regulated areas are raising expectations for a rebound. This is due to the real estate measures announced on October 15, which designated all districts of Seoul and 12 areas in Gyeonggi Province as regulated zones. As a result, buyers who previously benefited from the so-called "balloon effect" in non-regulated areas are now turning their attention to these zones, which offer various advantages such as higher loan-to-value (LTV) ratios and debt service ratio (DSR) benefits.
In fact, in the past, after the announcement of strong real estate regulations, demand surged in the beneficiary areas, resulting in the balloon effect. This is why a rebound is expected in non-regulated areas following the latest policy announcement.
The real estate measures announced on August 2, 2017, known as the 8·2 Real Estate Policy, were strong regulations aimed at protecting genuine homebuyers and curbing speculative demand. Key elements of the policy included the reinstatement and designation of speculation-prone districts, stricter mortgage regulations, restrictions on the resale of pre-sale rights, tighter LTV rules, stricter first-priority subscription requirements, and mandatory residency obligations.
During this period, buyers avoided Seoul, which was designated as a speculation-prone district, as well as Gwacheon in Gyeonggi Province and Sejong City, and instead flocked to areas with relatively fewer regulations or those designated as adjustment zones, such as Dongtan, Gwangmyeong, Hanam, Guri, and Suji.
According to the Korea Real Estate Board's subscription portal, before Gwangmyeong was designated as a speculation-prone district, the Cheolsan Central Prugio, which was offered for sale in July 2018, saw 3,715 first-priority applicants for 201 general supply units, recording an average competition rate of 18.48 to 1. The exclusive 84-square-meter unit in the complex was traded at 1.38 billion won on September of this year, nearly double the pre-sale price of 731 million won.
A similar trend continues today. The exclusive 84-square-meter unit at 'E-Pyunhansesang Inchang Urban Foret' in Guri, Gyeonggi Province (which began occupancy in August 2020), set a new record price of 1.178 billion won on October 27 of this year, after the announcement of the October 15 measures. This is more than 200 million won higher than the 950 million won transaction for the same unit type at the beginning of this year in January. Guri is now considered a prime beneficiary area that has recently avoided new regulations.
A real estate expert commented, "After the announcement of the October 15 real estate measures, asking prices and transaction prices have been rising in areas that avoided regulation, showing a similar trend to previous periods of strong regulation. It is worth noting that genuine homebuyers are also likely to flock to these non-regulated areas in the subscription market."
Against this backdrop, housing complexes in non-regulated areas that are about to go on sale are attracting significant attention from buyers.
Woowa Construction is launching 'Hwaseong Namyang New Town Woowa Lin Edu High' in Namyang-eup, Hwaseong-si, Gyeonggi Province. The complex will consist of six buildings, each with two basement levels and 24 above-ground floors, offering a total of 556 units with an exclusive area of 84 square meters. Notably, since it is located within the public development area of Namyang New Town, the price ceiling system will apply, ensuring a reasonable pre-sale price. Major infrastructure, such as the relocation of Hwaseong City Hall and the planned double-track Seohae Line railway, is gradually being established. In addition, a new elementary and middle school located right in front of the complex is scheduled to open in March 2026, and the Hwaseong City Namyang Library and Namyang New Town academy district are also nearby.
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