Rapid Rise in Housing Prices Spurs 'Su-Yong-Seong' Regulation Push... "It's Inevitable, Prices Will Still Rise"

Government to Designate Suwon, Yongin, and Seongnam as Adjustment Areas Amid Recent Housing Price Surge
Local Realtors Respond Calmly, Calling It "Expected Regulation"

Suwon's Paldal and Gwanggyo New Town Remain Regulated but Prices Continue Rising
Nearby Areas Likely to See Homeowners Maintain Asking Prices Due to Learning Effect

[Asia Economy Reporters Onyu Lim, Chunhee Lee] "What was expected has come."

The government is considering designating Suwon, Yongin, and Seongnam (commonly known as 'Su-Yong-Seong'), where housing prices have surged, as regulated areas, prompting local reactions that this is a "predicted step." A representative from real estate agency A in the Homaesil district of Gwonseon-gu, Suwon, said, "This regulation did not deviate even an inch from investors' expectations."

However, the local real estate industry predicts that this regulation will not stop the upward trend in housing prices. Since the area benefits from overlapping transportation advantages and continuous demand inflow, it will be difficult to calm the rising trend. Currently, the actual transaction price of an 85㎡ (exclusive area) unit in 'Hoban Verdiem The First' in Homaesil district soared from around 600 million KRW in early last month to 770 million KRW in just 20 days. He said, "Buyers have already learned that Paldal-gu and Gwanggyo New Town, which are already designated as regulated areas, continue to rise," adding, "Homeowners will not easily lower their asking prices."

On the 13th, the government reportedly held a Green Room meeting chaired by Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki to consider adding some areas in the metropolitan area, including Su-Yong-Seong, to the list of regulated areas. This move aims to cool down the overheated atmosphere with regulatory measures after housing prices surged in the southern Gyeonggi region following the December 16 real estate measures targeting Seoul.

▲ Construction site of 'Maegyo Station Prugio SK View' in Maegyo-dong, Paldal-gu, Suwon (Photo by Lee Chunhee)

According to the weekly apartment sales price index by the Korea Real Estate Board, housing prices in Suwon rose 2.04% compared to the previous week as of the 10th. It is the only region nationwide to have risen more than 2%. The cumulative increase over eight weeks since the December 16 measures is 6.88%. By district, Yeongtong-gu surged by a whopping 8.34%, showing the highest increase nationwide. Gwonseon-gu and Paldal-gu followed with increases of 7.68% and 7.30%, respectively. Suji-gu in Yongin City also showed a sharp rise of 5.75%. For example, the actual transaction price of an 85㎡ unit in 'Seongbok Station Lotte Castle Gold Town' in Seongbok-dong, Suji-gu, rose from 850 million KRW in October last year to 1.172 billion KRW recently. A representative from real estate agency G in this area calmly responded, "Even though it is a regulated area, since Su-Yong-Seong are all rising together, the regulation was expected."

In the market, there is a high possibility that currently non-regulated areas such as Gwonseon and Yeongtong-gu in Suwon and Sujeong-gu in Seongnam will be additionally designated as regulated areas. Additional regulations are also expected for areas already designated as regulated, including Paldal and Yeongtong-gu in Suwon, Gwanggyo New Town, Suji and Giheung-gu in Yongin, and Bundang-gu in Seongnam.

However, the local atmosphere suggests that the government's additional regulations have limitations in calming the rise in housing prices. A representative from real estate agency M in Seryu-dong, Gwonseon-gu, Suwon, said, "If it becomes a regulated area, speculation by homeowners will be somewhat difficult, but there are many inquiries from young actual owners such as Samsung Electronics employees in this area," adding, "The regulatory effect will not be significant." A representative from real estate agency H in Maetan-dong, Yeongtong-gu, Suwon, also said, "Even in urgent sales, undervalued housing prices are returning to their proper levels," adding, "With the scheduled move-in of reconstruction apartments in Maetan Jugong Complexes 4 and 5, there is more room for housing prices to rise."

Some local real estate agencies report that investors are targeting urgent sales by multi-homeowners trying to avoid the increased capital gains tax due to regulations. In fact, in Suji-gu, Yongin, urgent sales transactions occurred continuously just before the area was designated as a regulated area.

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