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

Following the announcement of the October 15 real estate measures, both apartment transaction volumes and prices increased in non-regulated areas designated as land transaction permit zones, such as Guri and Hwaseong in Gyeonggi Province. This trend is analyzed as a result of a surge in gap investment demand seeking to avoid mandatory occupancy requirements.

According to the Ministry of Land, Infrastructure and Transport's actual transaction price system on December 6, apartment transaction volume in Guri, Gyeonggi Province, reached 541 cases from October 20, when the land transaction permit zone regulations were expanded, through December 4. This represents a 36.9% increase compared to the 396 transactions recorded during the 45 days prior to the regulatory expansion. In Hwaseong, transaction volume rose from 1,635 cases to 2,354 cases, a 44% increase, when comparing the 45-day periods before and after the implementation of the regulations.

In Incang-dong, Guri, a 84-square-meter unit in E-Pyunhansesang Incang Urban Foret was sold for 1.295 billion won on November 12, setting a new record high. This is an increase of 90 million won from the previous month. A 84-square-meter unit in Hillstate Guri Station was traded for 1.245 billion won on November 9, up 35 million won from the previous transaction, also setting a new record. Another 74-square-meter unit in the same complex was sold for 1.05 billion won, 55 million won higher than the previous transaction, marking a new peak.

In Sutaek-dong, Guri, a 59-square-meter unit in E-Pyunhansesang Sutaek Central Park was sold for 797 million won on November 19. This is an increase of 60 million won compared to the price in early September. The 84-square-meter unit was sold for 955 million won on November 14, which is 50 million won higher than the price two months ago.

Perspective view of Dongtan Station Lotte Castle. Lotte Construction

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

The head of B Realty in Osan-dong, Hwaseong, said, "Lotte Castle, where prices are relatively high, saw many transactions up until just before the regulations, and after the announcement, the buying trend spread to nearby complexes. Before the regulations, gap investment demand accounted for more than 60%, but recently it has dropped to about 40%. Buyers are looking for listings in complexes where there is little difference between actual transaction prices and asking prices, while sellers are reluctant to lower prices, yet prices are rising close to previous peaks."

As investment demand has concentrated in non-regulated areas, the rate of price increase has surpassed the levels seen before the October 15 measures. According to KB Real Estate's weekly cumulative sales price increase rate, comparing the six weeks before and after the policy announcement (September 8-October 20 and October 27-December 1), Guri's rate rose from 0.1% to 0.9%, and Hwaseong's from 0.07% to 0.68%.

Yang Jiyeong, a senior specialist at Shinhan Premier Pathfinder, said, "Dongtan and Guri are benefiting from the spillover effect of regulations in other areas," and added, "In order for the price increase trend to continue, there must be steady investment demand, so it is important to closely examine variables such as interest rate cuts, development benefits, and the intrinsic value of these areas."