"Dongtan Apartment Prices Soar by 500 Million Won in Two Weeks Amid Bonus Windfall"

"Even After Compensation, Sellers Still Profit"
Contract Cancellations Surge
Government Plans to Designate Regulated and Land Permit Zones

Following the decision by Samsung Electronics and its labor union to grant large incentive bonuses, apartment prices in Dongtan New Town, Hwaseong City, have soared vertically. As a result, there has been a sharp increase in cases where sellers cancel contracts to provide double compensation and raise the asking price.

Reference photo of an apartment in Dongtan.

According to the Ministry of Land, Infrastructure and Transport’s actual transaction price system on June 21, there were 1,355 apartment sale contracts in Dongtan District, Hwaseong City, in May. With about ten days still remaining before the reporting deadline, the transaction volume has already surpassed the previous month's total of 1,001 cases.

On May 27, Samsung Electronics and its labor union promised to pay large semiconductor performance bonuses and provide housing loans of 500 million won. As apartment prices surged, homeowners who had sold their properties at lower prices before the labor-management agreement began demanding contract cancellations. The number of canceled contracts in May reached 82, a 74% increase compared to the previous month’s 47 cases.

The exclusive 84-square-meter unit of 'Dongtan Station Lotte Castle', the leading property in the Dongtan Station area, sold for a record high of 2.225 billion won on June 4. Within just one month, the asking price surged from 1.9 billion won to 2.4 billion won.

A local real estate agency told Yonhap News, “Last month, a homeowner who sold at 1.6 billion won returned the 10% deposit received from the buyer, paid an additional 160 million won in compensation, and then relisted the property at 1.9 billion won, which is 300 million won higher. Even after double compensation, the seller gained 140 million won, so the number of contract cancellations has increased compared to usual.”

As contract cancellations rise, disputes have emerged between buyers offering to pay the interim payment in advance and sellers who refuse, in an effort to prevent further cancellations.

With the government considering designating Dongtan and other rapidly rising areas in the Seoul metropolitan region as regulated zones and land transaction permit zones, market responses are becoming polarized.

End-users, fatigued by rising prices, are taking a wait-and-see approach, saying they will buy only if prices fall after the area is regulated. On the other hand, investors seeking gap investment by purchasing properties with existing rental contracts are flocking to agencies to buy before the land permit designation takes effect, as seen over the past weekend.

Locals are questioning whether the government missed the “golden time” for designating regulated zones. A realtor in Dongtan commented, “Immediately after the bonus expansion, the area should have been regulated, but the government and politicians delayed the decision due to the upcoming local elections. During this time, prices rose to unprecedented levels. If Dongtan is designated as a regulated zone and a land transaction permit area, demand for gap investment will likely decrease, but with high incentive bonuses for semiconductor employees, it’s uncertain how much prices will actually drop.”

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