The government has designated Dongtan in Hwaseong, Giheung in Yongin, and Guri as land transaction permit areas due to soaring housing prices driven by the semiconductor industry. This has made the auction market in these regions a focal point. While the general sales market has seen increased barriers to transactions due to permit procedures and residency requirements, the auction market has experienced bids exceeding appraised values and heightened competition, suggesting a potential increase in future demand.
According to Gigi Auction on July 13, the auction sale rate for apartments in Dongtan, Hwaseong, rose from 95.01% in April to 98.03% in May, reaching 107.02% in June. The sale rate reflects the ratio of the final bid amount to the appraised value. The average number of bidders also increased during this period, from 6.20 to 7.56, and then to 10.45, indicating intensified competition.
High bid amounts have been recorded for individual properties as well. In an auction last month for a 102-square-meter unit at the 'Dongtan Station Lotte Castle Albatross' in Cheonggye-dong, 18 bidders participated, and it sold for approximately 1.1 billion won, about 120% of the appraised value. On July 3, just before the land transaction permit designation, a 104-square-meter unit at 'Lake Bandou Yubora Ivy Park' in Jangji-dong, Dongtan, was sold for 714 million won, exceeding its appraised value of 650 million won.
A similar trend is observed in Guri. In June, the average auction sale rate for apartments in Guri reached 103.72%, with a bid rate of 100%. The SK-Shinil Apartments in Topyeong-dong sold for 104% of the appraised value after 14 bidders competed. In Yongin's Sanggal-dong, a 60-square-meter unit at 'Geumhwa Village Jugong Greenville' also attracted 13 bidders, selling for 117% of its appraised value.
On July 5, the government designated Dongtan, Giheung, and Guri as land transaction permit areas. This measure aims to curb speculative transactions following a rapid increase in housing prices driven by the development of semiconductor industrial complexes and transportation improvements. After the implementation of the land transaction permit system, buyers of properties above a certain size must meet permit requirements for actual residency, which is expected to limit some investment demand in the general sales market.
In contrast, auctions are conducted under civil enforcement law, allowing purchases to proceed without needing a separate land transaction permit. This makes auctions an attractive alternative with lower entry barriers compared to general sales. As the auction sale rates and number of bidders have already increased, if some investment demand shifts from the general sales market to auctions, competition could intensify further.
The housing prices in the semiconductor belt region continue to rise. According to the Korea Real Estate Agency's report on apartment price trends for the first week of July, apartment prices in Dongtan, Hwaseong, increased by 1.29% compared to the previous week. Although the rate of increase has slowed, it remains above 1% on a weekly basis.
Experts believe that while the land transaction permit system may effectively suppress speculative demand, it will be challenging to weaken actual demand based on industrial complexes and transportation improvements in the short term. In areas like Dongtan, Giheung, and Guri, where proximity to workplaces is highly anticipated, some demand may shift to the auction market.
Kang Eun-hyun, head of the Law Firm Myungdo Auction Research Institute, stated, "Since auctions proceed without needing a separate land transaction permit, they have relatively lower entry barriers compared to general sales. Dongtan's market sentiment is already heated due to expectations surrounding Samsung Electronics' investments. If general sales are restricted by the land transaction permit system, there is a significant possibility that some investment and actual demand will turn their attention to the auction market."
* This article has been translated by AI.
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