According to an article published in The Korean Herald on Tuesday, Samsung Electronics recently implemented compensation program for semiconductor workers is fueling anticipation that more liquidity could further drive-up apartment prices throughout South Korea’s semiconductor belt.
According to the source, on May 20, Samsung Electronics and its labor union came to an agreement to introduce a low-interest housing loan scheme for workers in addition to a new performance bonus system based on semiconductor earnings.
The report said, under the housing support scheme, employees who do not own homes can borrow up to 500 million won (USD 370,000) for purchasing homes and up to 300 million won (USD 199,185) for jeonse deposits at a fixed annual interest rate of 1.5 per cent, repayable over a 10-year period. Jeonse is South Korea’s lump-sum rental system in which tenants provide a large deposit instead of paying monthly rent.
The company also agreed to set aside nearly 10 per cent of operating profit into a new performance bonus pool for semiconductor employees. The move is expected to lead to payouts worth hundreds of millions of won for some workers early next year.
Although stock-based bonus payments will be subject to selling restrictions, industry observers believe that the combination of substantial cash compensation and low-cost financing will significantly improve employees’ purchasing power.
“Samsung’s housing loan system could continuously support tens of thousands of employees, potentially influencing apartment prices in key residential areas across southern Gyeonggi,” the report quoted a real estate industry official saying.
“If buying demand concentrates around the loan eligibility range, some apartment prices could gravitate toward around the 2.5 billion won level,” the official added.
Areas located near Samsung Electronics and SK hynix facilities, or along employee shuttle bus routes, are already outperforming the wider Seoul metropolitan housing market.
According to the Korea Real Estate Board, apartment prices in Yongin’s Suji district rose 0.38 per cent during the third week of May. Suwon’s Yeongtong district recorded a 0.35 per cent increase, while Hwaseong’s Dongtan district climbed 0.49 per cent.
The pace of price growth has accelerated in recent weeks. Weekly increases in both Suji and Dongtan were more than 0.1 percentage point higher compared to the previous week, while Yeongtong’s growth rate accelerated from 0.26 per cent.
Dongtan, considered one of South Korea’s major semiconductor residential hubs, has already witnessed record apartment transactions.
An 84-square-metre apartment unit at Dongtan Station Lotte Castle was sold for a record 2.08 billion won (USD 1.38 million) on May 7, surpassing the previous high of 1.94 billion won (USD 1.29 million) recorded just one month earlier, according to government data. A 102-square-metre unit in the same apartment complex also reached a new record of 2.24 billion won (USD 1.49 million) on May 9.
The area is located close to Samsung’s Hwaseong and Giheung semiconductor campuses, as well as ASML’s Hwaseong site, making it one of the most concentrated residential zones for semiconductor workers in South Korea.
(ANI)
Syed Ziyauddin is a media and international relations enthusiast with a strong academic and professional foundation. He holds a Bachelor’s degree in Mass Media from Jamia Millia Islamia and a Master’s in International Relations (West Asia) from the same institution.
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