Samsung's 1.5% staff loans meet a Dongtan market trading a tenth of its spring volume

Dongtan is now clearing about 9 percent of its spring volume ^[18]. In the three months before the rules took effect on July 5, 4,362 apartment sales were registered ^[7]. With so few trades, a weekly price index reflects a small group of buyers, and the rules have narrowed that group to people who will live in what they buy ^[6]. Samsung Electronics has given some of those buyers more credit than a conventional mortgage can supply ^[4][5].

An eligible employee can put the company's 500 million won on top of a conventional mortgage capped at 600 million won ^[3][5]. Combined, the two reach 1.1 billion won ^[15], and the in-house portion is exempt from debt service ratio rules ^[4]. At 1.5 percent, the full Samsung loan costs 7.5 million won a year in interest ^[16]. Kim In-man, head of a real estate economic research institute, said "Gyeonggi still has many apartments priced at around 1 billion won." ^[12] On a flat at that price, the company loan alone covers half the purchase ^[19].

Korea JoongAng Daily says the rebound "coincided" with the loan's launch ^[20], but the first jump came at or before the money was available. Dongtan's weekly gain fell from 1.46 percent in the last week of June to 0.12 percent in the third week of August ^[1]. It reached 0.54 percent the following week ^[2], 4.5 times the prior reading ^[17], in a week that ends at or before the loan's Sept. 1 start ^[21]. Either buyers moved early on a program they knew was coming, or something else restarted the rise. The report does not give the program's announcement date, its total size or how many employees have drawn on it. The 0.47 percent gain in the final week of September, the steepest in Gyeonggi ^[2], sits well inside the loan period.

The paper's account allows other explanations. It attributes one to unnamed analysts, who say a small number of high-priced transactions may have pushed up the indicators amid a listing shortage ^[22]. Another is a move across the whole belt. Since last month prices have risen there whether or not an area is regulated, and Giheung in Yongin, also a regulation zone, has shown little sign of slowing ^[9]. A real estate agent in Dongtan told the paper that "end-user demand continues to flow into the semiconductor belt, backed by liquidity from bonuses at Samsung Electronics and SK hynix." ^[11]

I think the loan and the analysts' caveat describe one channel. A few expensive purchases in a thin market is what a cheap credit line aimed at one employer's staff would produce, because a buyer with an extra 500 million won can bid above the last trade. The counter-thesis is the rest of the belt. Unregulated districts nearby rose in July and August, before the loan existed ^[8][3], and the agent's bonus explanation covers SK hynix staff too. The view fails if a breakdown of late-September Dongtan buyers shows few Samsung employees among them.

Kim points to a second pool of buyers, priced out of Seoul. "Many apartments in northern Seoul now cost more than 1.5 billion won," he said ^[13]. "I'm concerned that the housing boom in Seoul could shift to Gyeonggi," he said ^[14].