Record-high apartment deals are piling up in Dongtan, a district of Hwaseong in Gyeonggi Province, where prices have already risen at a double-digit pace this year. Attention is now turning to whether Samsung Electronics will draw fresh buyers into the market when it begins offering low-interest housing loans next month to employees who do not own a home. Because the program caps eligibility by unit size and price, however, demand is more likely to concentrate in smaller and mid-size apartments with good access to Samsung's plants than to lift the entire market.
Apartment sale prices in Dongtan rose 16.32% this year through August 17, according to the Korea Real Estate Board. Jeonse prices, paid as a lump-sum deposit instead of monthly rent, climbed 10.87% over the same period. Dongtan has established itself as a major residential area in the southern Seoul metropolitan region, combining short commutes to Samsung Electronics' Hwaseong and Giheung plants and nearby semiconductor suppliers with improved access to Seoul since the GTX-A line opened at Dongtan Station.
Transaction data points the same way. Of 494 apartment size categories traded in Dongtan between June and the 25th of this month, 319 recorded record-high prices, according to an analysis of transaction records by Ham Young-jin, head of the real estate research lab at Woori Bank. That is 64.57% of the total, the highest share in Gyeonggi Province.
The size of the increases has been substantial. A 97.04-square-meter unit at The Sharp Central City in Cheonggye-dong sold for 2.16 billion won, 500 million won above the previous high. A 128.93-square-meter unit at Dongtan Station Sibeom Hanwha Kkumedgreen Prestige changed hands at 2.4 billion won, up 420 million won. A 84.83-square-meter unit at Sibeom Bando Ubora IV Park 4.0 sold for 1.59 billion won and a 97.86-square-meter unit at Dongtan Station Heriot for 1.4 billion won, up 390 million won and 380 million won respectively from their previous highs.
Samsung Electronics' housing support program has emerged as a new variable. From September 1, the company plans to offer mortgage loans at an annual rate of 1.5% to employees who do not own a home. In the Seoul metropolitan area, eligible homes must have a floor area of 85 square meters or less and a price of 2.5 billion won or less, with a borrowing limit of 500 million won. The rate is well below recent mortgage rates at commercial banks, which is expected to ease the financing burden for people buying a home to live in.
Dongtan, close to Samsung's plants, is cited as one of the areas that stands to benefit. Demand could grow for eligible smaller and mid-size units in complexes offering easy commutes. Still, it is difficult to conclude that the Samsung loans alone will trigger another sharp run-up across the Dongtan market. Factoring in lending restrictions and land transaction permit zones, analysts say low-rate loans are unlikely to translate directly into large-scale buying.
"Dongtan has solid demand from people who want to live near work in the semiconductor industry, and transport and amenities keep improving, so there are many factors supporting a floor under home prices," Ham said. "The Samsung Electronics employee housing loan could generate additional demand, particularly for units of 85 square meters or less in complexes with good access to the plants."
