A new variable has emerged in the housing market of Dongtan in Hwaseong, Gyeonggi Province, where apartment prices have jumped more than 16% this year. Samsung Electronics will begin offering home loans at an annual rate of 1.5% to employees who do not own a home starting next month, drawing attention to whether buying demand will strengthen further in Dongtan, located near the company's plants.
Apartment sale prices in Dongtan District, Hwaseong, rose 16.3% from the start of this year through the 17th, according to the Korea Real Estate Board on the 26th. Jeonse prices climbed 10.9% over the same period, showing strength in both the sales and rental markets.
Dongtan is considered an area with abundant demand from buyers seeking homes close to work, as Samsung Electronics' Hwaseong and Giheung plants and other semiconductor-related companies are clustered nearby. Access to Seoul has also improved with the opening of the Great Train Express (GTX)-A line, making the rise in home prices more pronounced this year.
As prices climb rapidly, transactions surpassing previous record highs are coming in succession.
Ham Young-jin, head of the real estate research lab at Woori Bank, analyzed transaction data from the Ministry of Land, Infrastructure and Transport and found that of 494 apartment size categories traded in Dongtan District between June and the 25th of this month, 319 recorded their highest prices for the period. That ratio of 64.6% was the highest in Gyeonggi Province over the same period.
A 97.04-square-meter unit at The Sharp Central City in Cheonggye-dong changed hands last month for 2.16 billion won, exceeding the previous record by 500 million won. A 128.93-square-meter unit at Dongtan Station Sibeom Hanwha Kkumegreen Prestige also sold for 2.4 billion won, up 420 million won from the previous high.
With the market already heated, some expect the employee home loan program starting next month to provide additional upward momentum.
From the 1st of next month, Samsung Electronics plans to lend up to 500 million won for home purchases at an annual rate of 1.5% to employees who do not own a home.
Dongtan has a considerable number of small and mid-sized apartments that meet the loan requirements of 2.5 billion won or less in price and 85 square meters or less in exclusive floor area. Local brokerages say inquiries from Samsung Electronics employees about home purchases have been increasing in Dongtan and other parts of southern Gyeonggi ahead of the program's launch.
Some analysts say it remains to be seen whether the low-rate loans will again push up apartment prices across Dongtan by a wide margin, since eligibility is limited to employees who do not own a home and conditions are attached to both price and floor area.
As a result, demand is seen as relatively more likely to concentrate on popular small and mid-sized complexes, those near shuttle bus routes to Samsung Electronics plants and those close to subway stations.
"For the time being, the Dongtan apartment market is more likely to see a differentiated market in which record prices continue at preferred complexes with strong proximity to work and product quality, rather than a broad-based surge," Ham said. "From September, it will be necessary to watch transaction volumes and price trends closely, centered on small and mid-sized apartments near subway stations."
