"You Don't Have to Live There Yourself": Dongtan and Suji's Housing Boom Spreads to Giheung... Standard Units Surpass 1.5 Billion Won [Real Estate AtoZ]

Record-High Prices in Giheung District Without Owner-Occupancy Mandate
Gap Investors Target Giheung Amid Neighboring Regulation
Semiconductor Performance Bonuses Drive Demand Surge, Transactions Soar

The upward trend in housing prices that began in Dongtan District, Hwaseong City, and Suji District, Yongin City, is now spreading to Giheung District, Yongin City. Giheung District was excluded from being designated as a land transaction permission zone in the government’s October 15 measures last year, meaning buyers are not required to live in the property for two years after purchase, which enables “gap investing” (buying a home with a tenant in place). The area has also seen a series of record-high transactions for leading apartment complexes, spurred by demand from semiconductor companies such as Samsung Electronics and SK hynix and the additional boost from performance bonuses.

First “National Average Apartment” Surpasses 1.5 Billion Won... Record Highs for Both Old and New Complexes

Aerial view of "E-Pyunhansesang Guseong Station Platform City" in Giheung-gu, Yongin-si, Gyeonggi Province. Naver Real Estate

According to the Ministry of Land, Infrastructure and Transport’s official real estate transaction disclosure system on June 13, an 85-square-meter (exclusive area) unit at “E-Pyunhansesang Guseong Station Platform City” in Mabuk-dong—a flagship apartment complex in Giheung District—was sold for 1,540 million won (on the 27th floor) on May 23. This marks the highest-ever price for an 84-square-meter “national average” unit in Giheung District, and it is the first time this benchmark has surpassed 1.5 billion won. This same area transacted for 1,260 million won (20th floor) in July last year, registering an increase of 280 million won in just 10 months. A 59-square-meter unit in this complex also set a new high, selling for 1,215 million won (13th floor) on May 1.

The Jukhyeon Village area in Bojeong-dong, benefiting from proximity to Guseong Station on the Suin-Bundang Line and the Platform City project, is also strong. An 84.6-square-meter unit at “Jukhyeonmaeul Dongwon Royal Duke” set a new record, contracting for 1,290 million won (18th floor) in April. Compared to a unit on the same floor selling for 1,095 million won in September last year, the price rose by nearly 200 million won in just seven months. In the same complex, a 125.5-square-meter unit fetched a record 1,450 million won (10th floor) in January, and a 152.34-square-meter unit hit 1,485 million won (6th floor) in May. Nearby, an 84.76-square-meter unit at “Jukhyeonmaeul I-Park” was traded at 1,125 million won (8th floor) in April, also marking a new high. Even apartments that are close to 20 years old are seeing prices adjusted upward in line with newer properties.

Newly built and quasi-new complexes near Giheung Station have also joined the record-breaking trend. At “Hillstate Giheung” in Gugal-dong, an 84.95-square-meter unit was sold for 1,200 million won (21st floor) on June 4, setting a new record. This is an increase of 60 million won in just a month from the previous actual transaction prices (1,140 million won) in April and May. A 72.73-square-meter unit in the same complex set a new high at 1,090 million won (30th floor) in February. This apartment size, which remained around the 800 million won range in the past, surpassed the 900 million barrier in mid-October last year following the October 15 measures, and has since risen rapidly. The 95.99-square-meter unit was also sold at a record 1,250 million won (37th floor) in April, up 170 million won compared to the June 2023 transaction (1,080 million won, 38th floor).

Other surrounding complexes are rising in tandem. A 72.5-square-meter unit at “Giheung Station The Sharp” set a new high with a transaction of 930 million won (14th floor) on May 27. Compared to 780 million won (10th floor) a year earlier, in May 2023, that’s an increase of 150 million won. At “Giheung Station Central Prugio,” an 84.74-square-meter unit traded for a record 1,015 million won (39th floor) on June 5, and just three days later, another unit sold for 1,008 million won (28th floor). Considering that similar units were trading in the 800 million won range in May last year, transactions passing the 1 billion won threshold have now become the norm within just a year.

As purchasing sentiment pours into Giheung District, transaction volumes have surged. Excluding cancellations, there were 3,977 apartment sale transactions in Giheung District between January 1 and June 12 of this year, representing a 91% increase compared to 2,086 transactions during the same period last year. The growth is even more pronounced if only the January to May period is compared, given that June's data is still being reported. For January to May 2024, there were 3,810 transactions, more than double the 1,874 recorded in the same period last year.

Gap Investing Rushes in Amid Loosened Regulations... Giheung Emerges as an Alternative to Dongtan and Suji

Based on the Korea Real Estate Board’s weekly apartment sales price index, Giheung District’s prices have risen 5.66% from the start of the year through the second week of June. During the same period, Suji District rose 8.56%, while Dongtan rose 7.19%. Although Giheung’s growth rate is lower than those of Dongtan and Suji, market observers say that the pricing burden in those areas is creating a “spillover” effect, with buyers shifting their attention to Giheung District.

With Dongtan’s “national average apartment” units exceeding 2 billion won, the relatively lower prices in Giheung District are drawing attention as a substitute. Giheung is home to the Samsung Electronics Giheung Campus and is located between the Hwaseong and Pyeongtaek Samsung Electronics campuses and the future SK hynix site in the upcoming Yongin Semiconductor Cluster. Despite being well within the demand area for high-income semiconductor workers, apartment prices in Giheung are still 9.2% below their previous peak in January 2022. This has fueled expectations that there’s further room for price appreciation.

Demand is also shifting from Suji—now a regulated area—to Giheung. Although Suji was designated as a land transaction permission zone under the October 15 measures and has recorded a cumulative increase of 8.56% so far this year, buyers there must live in the property for two years, prohibiting purchases with a tenant in place. In contrast, Giheung, as a non-regulated area, does not have this restriction. This makes it more feasible for “gap investors” to either buy properties with tenants or lease them out after purchase, reducing upfront capital requirements and encouraging further gap investment activity.

Ham Youngjin, Head of Real Estate Research Lab at Woori Bank, said, “Giheung is adjacent to Suji and benefits from positives such as the GTX-A Guseong Station and Platform City development, yet it has not appreciated as much as Suji, which is attracting new buyers. Like Dongtan, Giheung is also seeing some influx of gap investors among high-income employees of semiconductor companies such as Samsung Electronics or SK hynix, who are using performance bonuses as leverage.”

Ham continued, “Unlike Suji, Giheung still has room for entry via gap investment, and as expectations mount that Giheung’s prices will eventually catch up to Suji’s, buyers who find Suji too expensive are turning to Giheung as an alternative.”

If the market continues to overheat, additional regulatory measures may be considered. As both Giheung and Dongtan have seen simultaneous increases in prices and transaction volumes since the start of the year, they are now being mentioned as candidates for additional designation as adjustment areas or “overheated speculation zones.” While the land transaction permission zone (LTPZ) system is not based solely on quantitative requirements, some expect that if the government becomes concerned about widespread price increases, it could pursue additional regulation after further discussion.

Notably, a proposed amendment to the Act on Reporting of Real Estate Transactions, which would expand the authority of the Minister of Land, Infrastructure and Transport to directly designate LTPZs, was revised and passed by the National Assembly’s Legislation and Judiciary Committee in February. It now awaits a final vote by the full Assembly. Under the current law, such designations within a metropolitan city or province can only be made by the mayor or governor. However, if the revision is enacted, the Minister of Land would be able to directly designate overheated areas as LTPZs without local government coordination, effectively enabling the government to immediately block gap investment in such areas.

This content was produced with the assistance of AI translation services.