Gov't newly designates 3 areas in Gyeonggi as speculative zones
Apartment complexes can be seen in Dongtan, Gyeonggi Province, Monday. Yonhap
The government on Tuesday designated three new areas in Gyeonggi Province as speculative zones subject to tighter lending rules, following a sharp rise in home prices in the areas.
The Ministry of Land, Infrastructure and Transport said it designated Dongtan Ward in Hwaseong, Giheung Ward in Yongin and Guri as regulatory zones during a residential policy deliberation committee meeting held Monday.
The ministry said the designations are intended to curb speculative buying, protect genuine homebuyers and address overheating in the housing market.
Property prices in Dongtan and Giheung have risen recently amid expectations of further gains, fueled by windfall bonuses received by employees of Samsung Electronics and improvements in transportation infrastructure. The two areas are near the chipmaker's headquarters in Suwon and key production facilities.
Real estate prices in Guri have also climbed, as the city is close to Seoul, particularly the Gangnam business district.
Home prices in Dongtan rose a cumulative 11.38 percent as of the fourth week of June, marking the largest increase in the country. Guri posted a 7.87 percent gain over the period, while Giheung recorded a 6.21 percent increase.
The new designations will take effect Wednesday and remain in place until Dec. 31, 2027, the ministry said.
Under the designation, a mortgage loan ceiling of 600 million won ($420,688) will apply to homes priced at 1.5 billion won or less in the areas.
The ceiling will be capped at 400 million won for homes valued between 1.5 billion won and 2.5 billion won, and 200 million won for homes worth more than 2.5 billion won.
Home buyers will also be required to reside in the area for at least two years and will be prohibited from purchasing homes using jeonse, or lump-sum deposits.