'340.3 to 1'... The Housing Market Turned into a Lotto Game
DMC SK View I'Park Foret Sets Seoul's Highest Subscription Competition Rate
37,430 Applicants for 110 Units
Twice the Year's Highest 168:1 Ratio
HUG Price Controls Lead to 'Half-Price Sale'
New Market Contraction Also Fuels Overheating
Perspective view of 'DMC SK View I-Park Foret' in Eunpyeong-gu, Seoul (Provided by SK Engineering & Construction)
View original image[Asia Economy Reporter Chunhee Lee] The government's control over sale prices is driving the competition rate for apartment subscriptions in Seoul to unprecedented heights. Although the supply under the price ceiling system has not yet entered the market, the average competition rate has reached an all-time high, indicating an overheated subscription market. The industry expects that once the supply under the price ceiling system becomes full-scale, more subscriptions aiming for the 'lottery win' guaranteed with several hundred million won in market price gains will flock.
According to the Korea Real Estate Board on the 20th, the subscription results for the first priority local area of 'DMC SK View I-Park Foret' in Susaek-dong, Eunpyeong-gu, Seoul, which took place the day before, showed that 37,430 people applied for 110 units, recording a competition rate of 340.3 to 1. This is the highest competition rate ever recorded in Seoul, surpassing the previous record of 307 to 1 at 'Acro Riverview' in Banpo-dong, Seocho-gu, Seoul, in 2016.
Compared to the highest competition rate this year of 168 to 1 at 'Daechi Prugio Summit' in Daechi-dong, Gangnam-gu, this rate is more than double. In particular, for the 102㎡ exclusive apartment, only 4 units were supplied, but 7,907 people applied, pushing the competition rate up to 1,977 to 1.
The industry cites the artificial price control through the high sale price review by the Housing and Urban Guarantee Corporation (HUG) as the main reason for this subscription fever. The sale price for the 84㎡ unit at DMC SK View I-Park Foret was set between 657.8 million and 684.3 million KRW. Considering that a similar-sized unit at the nearby 'DMC Lotte Castle The First,' which started moving in last June, recently traded at 1.1989 billion KRW, this is effectively a half-price sale.
The full implementation of the private land price ceiling system at the end of last month has also raised concerns that new sales in Seoul will shrink for the time being, which is cited as another cause of the subscription overheating. According to the Korea Real Estate Board, currently, there is only one complex in Seoul with a move-in recruitment announcement and ongoing subscription schedule. It is 'Hildesheim Cheonho' in Cheonho-dong, Gangdong-gu, a standalone apartment with 188 units. The industry understands that there will be no subscription schedules in Seoul for at least 2 to 3 weeks.
The implementation of the price ceiling system is also triggering conflicts within major redevelopment and reconstruction complexes. For example, 'Raemian One Bailey' (Sinbanpo 3rd and Gyeongnam Reconstruction) in Banpo-dong, Seocho-gu, and Jugong in Dunchon-dong, Gangdong-gu, applied for approval of move-in recruitment announcements at the end of July but are postponing sales repeatedly. Raemian One Bailey is deliberating between the HUG-approved sale price and the price ceiling system's applied price. Dunchon Jugong is facing setbacks in the project schedule due to the dismissal of the union executive caused by dissatisfaction among union members over the low approved sale price.
Hot Picks Today
Taking Annual Leave and Adding "Strike" to Profiles, "It Feels Like Samsung Has Collapsed"... Unsettled Internal Atmosphere
- There Is a Distinct Age When Physical Abilities Decline Rapidly... From What Age Do Strength and Endurance Drop?
- "One Comment Could Lead to a Report": 86% of Elementary Teachers Feel Anxious; Half Consider Resignation or Career Change
- "After Vowing to Become No. 1 Globally, Sudden Policy Brake Puts Companies’ Massive Investments at Risk"
- On Teacher's Day, a Student's Gifted Cake Had to Be Cut into 32 Pieces... Why?
Despite the controversy over the 'lottery' where a few winners enjoy several hundred million won in market price gains, the regulations related to the price ceiling system only impose a mandatory residence period of up to 5 years and a resale restriction of 10 years, with no institutional measures discussed for recovering market price gains. Minister of Land, Infrastructure and Transport Kim Hyun-mi recently stated regarding the 'lottery' controversy that "an appropriate sale price is formed so that non-homeowners with real demand can purchase housing at a reasonable price," expressing the view that low sale prices are not problematic.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
