The government is rezoning three additional communities in Gyeonggi Province where housing prices have increased sharply, making them subject to tighter regulations to prevent real estate speculation.
The Ministry of Land, Infrastructure and Transport said Tuesday that a residential policy deliberation committee decided the previous day to add the Dongtan area of Hwaseong, the Giheung area of Yongin and the city of Guri to the list of regulatory zones.
The rising prices in Dongtan and Giheung, situated near the Samsung Electronics headquarters and production facilities, reflect optimism about the semiconductor supercycle and improvements to the transportation infrastructure.
Guri’s close proximity to Seoul and its improved public transit system have increased housing prices there.
Mortgage loans will be capped at 600 million won, or around 388-thousand U.S. dollars, for homes in these areas priced at one-point-five billion won or less, and the caps will be set at 400 million won and 200 million won for homes in the next two price brackets.
The province’s urban planning committee has also designated the three areas as land transaction permit zones, meaning prior approval from the local authorities is required for transactions involving land or property exceeding a certain size.
Buyers in land transaction zones also can’t acquire homes under a practice known as “gap investment,” so called because the new landlord pays only the difference between the purchase price and the tenant’s lump-sum deposit, called “jeonse.”
This practice has been blamed for driving up apartment prices.
The new regulatory zone designations will take effect Wednesday, and the land transaction permit zone classifications will be in place from Sunday until December 31, 2027.
The government previously designated all 25 districts in Seoul and 12 areas of Gyeonggi Province as regulatory or land transaction permit zones as part of its anti-speculation policy package in October last year.
