Metropolitan Area 'Jupjup' Craze Seen in Suwon... Beware of Reckless Investment

Overheating of Jupjup Craze Due to 12.16 Balloon Effect in Suwon, Incheon, etc.
Hillstate Prugio Suwon Records Highest Competition Rate of 5477:1
70,000 Visitors in One Day Cause Subscription Site Crash
"Capital Area Differs from Seoul... Beware of Overvaluation"

[Asia Economy Reporter Onyu Lim] The so-called "Jupjup fever," where demand surges for non-priority subscription applications, is showing no signs of slowing down. Nearly 70,000 applicants flocked to the non-priority subscription for apartments supplied in Suwon. During this process, the company's official subscription website even experienced a system crash. Following the balloon effect of the recent December 16 real estate measures, investors are pouring into non-priority subscriptions in the metropolitan area, causing competition rates to soar from several thousand to tens of thousands to one. Although it is akin to a lottery, the atmosphere is heating up as some resort to unfair methods by mobilizing family and acquaintances in hopes of capital gains.

According to the construction and real estate industry on the 5th, 67,965 people applied for the non-priority subscription of "Hillstate Prugio Suwon" in Gyodong, Paldal-gu, Suwon, Gyeonggi-do, the day before. Considering that there were 42 remaining units due to contract cancellations, the average competition rate reached 1,618 to 1. The competition rate for the 84㎡ units (exclusive area), of which 8 units were available, soared to 5,477 to 1. The 59㎡ units, with 5 units supplied, also showed a four-digit competition rate of 3,348 to 1. Even the 43㎡ and 39㎡ units, which had fewer applicants, recorded triple-digit competition rates. Non-priority subscription is a lottery system to select winners for units left unsold due to disqualified applicants or contract cancellations, and multi-homeowners can also apply.

On that day, the website was overwhelmed with traffic, causing it to be unresponsive from the start of registration at 10 a.m. until 7 p.m. Although the originally scheduled closing time of 4 p.m. was extended, access issues persisted. Because of this, some applicants even went to PC bangs during lunch breaks in a somewhat comical situation. Mr. Lee (36), who lives in Suwon, said, "I waited for four hours straight, but only my wife succeeded while I failed," adding, "It's like trying to thread a needle just to apply, let alone win." On that day, complaints about the access failure flooded real estate-related internet communities and social networking services (SNS).

This subscription frenzy is a clear example of the balloon effect driving demand toward mid-to-low-priced apartments in non-regulated areas of the metropolitan area following the December 16 real estate measures last year. As house prices rise in relatively less regulated areas such as Suwon, Yongin, and Incheon, indiscriminate investments aiming for capital gains are expanding. In non-regulated areas, the resale restriction period for pre-sale rights is short at six months, and loan regulations are relatively lenient. Although Paldal-gu, where Hillstate Prugio Suwon is located, is included in the adjustment target area, it is a non-overheated subscription district, so resale of pre-sale rights is possible six months after winning. The 84㎡ occupancy rights for this apartment were traded last month at about 770.7 million KRW, roughly 200 million KRW higher than the sale price of 595 million KRW. Mr. Kim said, "Although the chance of winning is almost none, it is higher than the probability of winning by the point system in Seoul," adding, "If I win, I plan to somehow prepare the deposit."

Earlier, the non-priority subscription competition rate for Doosan We've the Park in Bupyeong, Incheon, recently supplied, reached 11,900 to 1. Some applicants reportedly mobilized not only family but also extended relatives to increase their chances of winning. Kim Hak-ryeol, director of SmartTube Real Estate Research Institute, said, "Unlike Seoul, where house prices are rising and regulations are strict, there are areas in the metropolitan area where regulations are relatively weak but price appreciation is possible," adding, "The non-priority subscription fever is people rushing to join the rising real estate trend." Preference for new apartments is increasing, and concerns that supply will shrink as the government strengthens redevelopment projects and loan regulations are also part of the background for the 'Jupjup fever.'

However, concerns about indiscriminate investment are also being raised. Unlike Seoul, apartments in the outskirts of the metropolitan area often have a relatively weak demand base and are frequently overvalued. Director Kim advised, "The fact that it has come to non-priority subscription means that the apartment was not chosen by applicants within the priority subscription ranks," adding, "Not all Jupjup guarantees capital gains, so caution is necessary."

This content was produced with the assistance of AI translation services.