Guri and Dongtan Avoid Regulations... Sharp Rise Followed by a Lull [Real Estate AtoZ]

Non-Regulated Areas Benefit After October 15 Measures
Transaction Volumes and Prices Surge in Guri, Hwaseong, and Dongtan
Sales Remain Strong, but Interest Rates and Regulations Remain Key Variables

Since the announcement of the October 15 real estate measures, apartment transaction volumes and prices have increased in non-regulated areas such as Guri and Hwaseong in Gyeonggi Province, which are designated as land transaction permit zones. This trend is analyzed as a result of gap investors seeking to avoid mandatory occupancy requirements flocking to these areas.

According to the Ministry of Land, Infrastructure and Transport’s real transaction price system on December 6, apartment transactions in Guri, Gyeonggi Province, totaled 541 cases from October 20, when the expansion of land transaction permit zone regulations was implemented, to December 4. This is a 36.9% increase compared to the 396 transactions in the 45 days prior to the regulatory expansion. Comparing the transaction volumes in Hwaseong over the 45 days before and after the regulation, the number rose from 1,635 to 2,354, an increase of 44%.

In Inchang-dong, Guri, a 84-square-meter unit at E Pyeonhansesang Inchang Urban Foret was sold for 1.295 billion won on November 12, setting a new record high. This is 90 million won higher than a month earlier. At Hillstate Guri Station, a 84-square-meter unit was traded for 1.245 billion won on November 9, up 35 million won from the previous transaction, marking a new record. In the same complex, a 74-square-meter unit was sold for 1.05 billion won, which is 55 million won higher than the previous transaction.

In Sutaek-dong, Guri, a 59-square-meter unit at E Pyeonhansesang Sutaek Central Park was sold for 797 million won on November 19. This is 60 million won higher than the sale price in early September. An 84-square-meter unit was sold for 955 million won on November 14, which is 50 million won higher than two months earlier.

Perspective view of Dongtan Station Lotte Castle. Lotte Construction

Dongtan is also a representative non-regulated area where the upward trend has been steep. At Dongtan Station Lotte Castle, known as the flagship apartment complex, a 65-square-meter unit was sold for 1.46 billion won on November 8, setting a new record. On October 20, an 84-square-meter unit changed hands for 1.69 billion won. At Dongtan Station Siheom The Sharp Central City, a 84-square-meter unit was sold for 1.5 billion won on November 25, setting a new record. The 106-square-meter unit was traded for 1.765 billion won, approaching the previous peak of 1.8 billion won recorded four years ago. At Dongtan Station Siheom Hanwha Kume Green Prestige, there were 19 transactions of 84-square-meter units in October and 13 in November alone.

The head of B Realty in Osan-dong, Hwaseong, said, "Lotte Castle, which is relatively high-priced, saw many transactions up until just before the regulations, and since the announcement, buying demand has spread to nearby complexes. Before the regulations, gap investment demand accounted for more than 60%, but recently it has dropped to around 40%," adding, "Buyers are looking for listings in complexes where the difference between actual transaction prices and asking prices is not significant, while sellers are reluctant to lower prices, but prices are rising close to previous peaks."

As investment demand has concentrated in non-regulated areas, the rate of price increase has become even higher than before the October 15 measures. Comparing KB Real Estate’s weekly cumulative price increase rates for the six weeks before and after the announcement (September 8-October 20, October 27-December 1), Guri rose from 0.1% to 0.9%, and Hwaseong from 0.07% to 0.68%.

Yang Jiyeong, Senior Specialist at Shinhan Premier Pathfinder, said, "Dongtan and Guri are benefiting from the spillover effects of regulations in other regions," adding, "Since continued investment demand is necessary to sustain the price uptrend, it is important to carefully consider variables such as interest rate cuts, development benefits, and the inherent value of these areas."