"After Bonus Payouts... Icheon, Top Semiconductor Hub, Doubled Home Purchases in Dongtan" [BOK Focus]

Average Monthly Real Estate Purchases by Icheon Residents
136 Cases in 2024 to 159 This Year, Mainly in Dongtan and Seoul
Monthly Purchases in Dongtan Surge from 9 to 25
“Need to Foster Conditions for Income to Flow into Consumption and the

Did the increased performance bonuses at Samsung Electronics and SK hynix (collectively known as Samsunghynix) lead employees to open their wallets wider? The Bank of Korea conducted a survey focusing on semiconductor high-exposure regions where Samsunghynix operates. Ultimately, the findings showed that card spending increased compared to previous levels. However, there was a notable detail: Icheon, which has the highest level of semiconductor industry exposure nationwide, showed a relatively weak consumption response. Upon closer examination, it was found that home purchases in this area increased more than elsewhere. As the effects of Samsunghynix’s performance bonuses next year are expected to grow to about five times this year’s size, it is a crucial change that must not be overlooked to ensure that the increased bonus payments flow through to local consumption and contribute to strengthening the broader economy.

According to the Bank of Korea (BOK) Issue Note released on September 1, titled “How Does Consumption Change in Semiconductor Boomtowns? – Regional Microdata Spillover Effects” by Heewan Jeong and Jaeho Lee, monthly card spending in high-exposure semiconductor regions was recorded to be up to 4% higher than in other areas. The analysis examined card spending in regions benefiting from the semiconductor industry such as Giheung-gu in Yongin, as well as Hwaseong and Pyeongtaek, where Samsung Electronics is based, and Icheon in Gyeonggi Province and Heungdeok-gu in Cheongju, North Chungcheong Province, where SK hynix is located. Converting the consumption effect in these areas to monetary terms, total cumulative spending from last year through June 2025 was calculated to be 1.1 trillion won higher than other areas.

If this trend continues, the accumulated increase in consumption is expected to amount to around 1.7 trillion won by the end of this year, potentially raising this year’s and next year’s gross domestic product (GDP) by 0.01% and 0.03% respectively compared to previous years. With next year’s performance bonus payouts expected to be about five times this year’s, it is projected that the growth rate could rise by up to 0.09 percentage points next year. This analysis has already been factored into the Bank of Korea’s growth forecasts for this year and next year (3.3% and 2.9%, respectively) released on August 27.

A notable point emerged when regional consumption was examined following performance bonus payouts: Icheon, identified as having the highest level of semiconductor industry exposure, showed a comparatively subdued consumption response. Jaeho Lee, Deputy Team Leader of the Research Bureau at the Bank of Korea, explained, “To clarify this, we compared the consumption flows of Heungdeok-gu in Cheongju—which, like Icheon, is home to an SK hynix plant and therefore subject to the same company’s bonus effect. Both regions saw increases in consumption relative to control groups, but the increase in Icheon was clearly smaller than in Heungdeok-gu.” The fact that two regions affected by performance bonuses from the same company showed different consumption responses suggests that spillover effects from bonus payments depend not only on the size of the bonuses but also on local conditions.

In Icheon, although the overall consumption response was relatively weak, housing-related spending rose sharply, suggesting that much of the extra income may have been used for home purchases. Among semiconductor beneficiary regions, Icheon showed the largest increases in consumption categories closely related to home acquisition, such as furniture, home appliances, kitchenware, and real estate brokerage services. This trend became more pronounced around the beginning of this year, when larger bonuses were paid.

An analysis of property registration data by purchaser’s residence confirmed that, immediately following bonus payouts, home purchases by Icheon residents in the Seoul metropolitan area rose significantly, while no similar change was observed among Cheongju residents. The average monthly number of real estate purchases by Icheon residents increased from 136 cases in 2024 to 159 in the January–July 2025 period. Purchases by Icheon residents were concentrated in the so-called “semiconductor belt” of southern Gyeonggi Province—including Dongtan (Hwaseong), Yongin, and Suwon—as well as major metropolitan areas such as Seongnam and Hanam. In particular, monthly purchases in Dongtan jumped significantly from 9 cases in 2024 to 25 cases in the first seven months of this year.

Areas where Icheon residents were most active in real estate transactions consistently shared two characteristics: high quality of living conditions, and excellent access to key semiconductor worksites such as Icheon. Lee noted, “In recent months, expectations of rising housing prices in the Seoul metropolitan area have provided increased incentives for home acquisition. The high price levels in these areas likely imposed a significant financial burden on buyers as well.”

Conversely, among Cheongju residents—who are based outside the Seoul metro area—traditional behavior persisted following bonus payouts, with most home purchases still taking place within the local area and little change in either the number of cross-regional transactions or the composition of purchase locations. As of 2025, the share of local properties among all real estate purchases by Cheongju residents (based on multi-unit buildings) was 80.5%, far higher than the 49.9% figure for Icheon.

If next year’s larger bonus payouts do not translate into increased consumption, but instead disproportionately flow into property and other assets, next year’s economic growth rate could fall short of the Bank of Korea’s projected 2.9%. As average bonus amounts per recipient are expected to rise next year, experts argue there is a need to foster conditions that will ensure increased income flows into consumption and the real economy, instead of being excessively absorbed by real estate markets, for similar positive ripple effects to be seen in other regions as well.

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