(June 30): South Korea imposed tougher property curbs in neighbourhoods outside Seoul with proximity to semiconductor hubs after a boom in the industry fuelled sharp home-price gains, raising concerns about speculative buying.

The government designated Hwaseong’s Dongtan district, Yongin’s Giheung district and the city of Guri as speculative zones and areas subject to tighter lending restrictions from July 1, the land ministry said. The three locations will also be placed under land transaction permit requirements from July 5. 

Housing prices in Dongtan and Giheung have been boosted by expectations surrounding the semiconductor industry’s expansion as well as improved transport links, including the GTX-A rail line, the ministry said. In Guri, demand has been supported by its proximity to Seoul and redevelopment around rail stations.

“There is a growing possibility that buying demand will flow into those areas due to their accessibility to Seoul, expectations for expanded transportation infrastructure and the growth of the semiconductor industry, making market management necessary to maintain stability,” Gyeonggi Province said in a separate statement.

The ministry said the measures are aimed at curbing speculative purchases and protecting end-users, adding that it will step up monitoring of the housing market while accelerating housing supply plans.

The latest measures come as Seoul apartment prices have extended gains for a 73rd consecutive week, underscoring the limited impact of previous government efforts to cool the housing market. Once the new rules take effect, 25 districts in Seoul and 15 in Gyeonggi Province will be designated as restricted areas.

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