[Edaily Reporter KIM EUN KYOUNG ] It has been about two months since the government designated Dongtan-gu in Hwaseong, Gyeonggi Province; Giheung-gu in Yongin; and Guri City as Land Transaction Permit Zones (LTPZs) to curb the housing price surge, but data shows that housing prices in all three areas have not fallen even once since the regulations took effect. On the contrary, critics point out that as price increases in surrounding unregulated areas have accelerated during this period, the targeted regulations have actually produced a “balloon effect,” spreading the upward trend in housing prices to neighboring areas.

According to the Korea Real Estate Board’s weekly apartment price trends released on the 14th, apartment sales prices in Dongtan-gu rose 1.46% in the last week of June—just before the implementation of the Land Transaction Permit System—but the rate of increase slowed significantly to 0.12% in the third week of August. However, in the very next week—the fourth week of August—prices jumped again by 0.54%, and they rose another 0.22% in the first week of September.

Giheung District and Guri City also maintained an upward trend consistently following the regulations. In Giheung District, the rate of increase expanded to 0.63% in the fourth week of August and rose another 0.33% in the first week of September. In Guri City, the rate of increase fell to 0.16% in mid-August but rebounded to 0.28% in the fourth week of August, followed by a 0.21% increase in the first week of September.

On June 30, the government designated Dongtan District, Giheung District, and Guri City as “speculation-prone zones” and “regulations-targeted areas” to curb the overheating of housing prices in these three regions. Regulations for speculation-prone zones and regulations-targeted areas took effect on July 1, while those for the land use restriction zone took effect on July 5.

Looking at the trend over the past two months, it is difficult to argue that the land use restrictions had no effect. In Dongtan in particular, where the weekly rate of increase had far exceeded 1% prior to the regulations, the rate of increase rapidly slowed after the regulations were implemented. However, prices did not decline in any of the three areas during this period, and in Dongtan and Giheung, the rate of increase began to rise again in August. While the regulations were effective in calming short-term overheating, they failed to halt the upward price trend itself.

The bigger problem is that while the upward trend in regulated areas slowed, housing prices in surrounding unregulated areas began to surge. In Byeongjeom-gu, Hwaseong—which shares a living area with Dongtan—the rate of increase, which stood at 0.16% in the last week of June (just before the regulations took effect), rose to 0.46% by the third week of August. This trend runs counter to that of Dongtan, where the rate of increase plummeted from 1.46% to 0.12% during the same period. Although the rate of increase in Byeongjeom slowed afterward, it still rose by 0.20% in the first week of September.

The upward trend in Suwon’s Gwonseon District was even more pronounced. The rate of increase, which stood at 0.25% just before the regulations took effect, expanded to 0.58% in the fourth week of August and remained at 0.48% in the first week of September. This is more than double Dongtan’s rate of increase (0.22%) during the same period.

Namyangju City, adjacent to Guri, also saw its rate of increase rise from 0.16% just before the regulations took effect to 0.27% in the second week of July, and it rose by 0.22% in the first week of September. This was slightly higher than Guri City’s rate of increase (0.21%) for the same week.

In regulated areas, purchasing a home imposes an obligation to reside there, effectively blocking “gap investment”—buying a home while using a jeonse deposit as collateral. As the threshold for entering regulated areas has risen, the incentive for demand to shift to surrounding areas with relatively fewer restrictions has increased. With the trend of accelerating home price increases in surrounding areas following the regulations, discussions are expected to intensify regarding the effectiveness of the “Tohu” system and the need for institutional improvements.

Park Jin-baek, an associate researcher at the Korea Research Institute for Human Settlements, stated, “The ‘No-Vacancy’ policy appears to be effective in moderating housing price increases in regulated areas, in line with its original goal of stabilizing housing prices.” He added, “However, since there are factors that could trigger a ‘balloon effect’ in surrounding areas, it is necessary to consider refining the system to some extent.”