Completion of Apartment Price Ceiling Evasion Sales... Eyes on the 'Stronger Lotto'

[Asia Economy Reporter Yuri Kim] As the last batch of pre-sales avoiding the private land price ceiling system has virtually ended, the pre-sale market has entered a lull. Major redevelopment and reconstruction associations and construction companies have started to tread carefully over the pricing and timing of pre-sales following the implementation of the price ceiling system. However, among buyers, expectations are growing for the 'stronger lotto' under the price ceiling system.

According to Real Estate 114 on the 24th, the number of apartments supplied nationwide in the last week of this month is limited to 7 complexes with 3,925 units (3,477 general pre-sale units). The supply volume over three weeks shows a clear decline: approximately 21,000 units → 11,000 units → 3,925 units. This is the result of exhausting the last batch of pre-sale units for complexes that applied for resident recruitment announcements just before the price ceiling system was fully implemented on the 29th of last month.

Industry insiders expect that when the price ceiling system is applied, the general pre-sale prices will be lower than the high-price review prices by the Housing and Urban Guarantee Corporation (HUG). The general pre-sale prices, which are already up to nearly 50% cheaper than market prices, are expected to decrease further.

Among the complexes supplied until the end of the year, many large complexes in key metropolitan areas, including Gangnam in Seoul, are included. In Gangnam, Dunchon-dong Jugong in Gangdong-gu (12,032 units) and Raemian One Bailey in Banpo-dong, Seocho-gu (2,990 units) are the most notable. Both complexes had already applied for resident recruitment announcement approval before the price ceiling system was implemented, but the associations plan to compare the prices under the price ceiling system before proceeding with general pre-sales. Dunchon Jugong, which had disagreements over the pre-sale method after conflicts with HUG over prices, plans to renegotiate the pre-sale method and schedule in a way most favorable to association members. Raemian One Bailey is also keeping the possibility of post-sale open due to the general pre-sale price being lower than the association member price. However, the industry expects that regardless of the price, the pre-sale price will be set at a level not far from about half of the market price.

Acro Park Bridge in Bangbae-dong, Seocho-gu (1,131 units), and Raemian in Imun 1 District, Imun-dong, Dongdaemun-gu (2,904 units) are also listed as complexes scheduled for supply within the year, attracting a large number of buyers. In the Gyeonggi area, the Gwangmyeong 2R District Redevelopment, a large complex with 3,344 units, is drawing attention.

The competition rate and winning scores for the last batch of pre-sale units just before the implementation of the price ceiling system continued to soar. The average first-priority subscription competition rate for 'DMC SK View I-Park Foret (Susaek 13 District Redevelopment)' in Eunpyeong-gu, Seoul, was 340.3 to 1, the highest competition rate among complexes sold in Seoul since computerized subscriptions began. Previously, Daechi Prugio Summit, which recorded 168 to 1, had an average winning score of 65.9 points. According to the Korea Real Estate Board, the average cutoff score for first-priority subscription winners for private apartments with over 100 units in Seoul was 57.7 points in the second quarter of this year, up 14.8 points from 42.9 points in the second quarter of last year.

The industry expects this phenomenon to intensify in the remaining subscriptions in the second half of this year. This is because the pre-sale price is expected to be 5-10% lower than HUG's high-price review under the price ceiling system, and from February next year, winners of private apartments subject to the price ceiling system will be required to fulfill a maximum of 5 years of actual residence obligation. Ham Young-jin, head of the Zigbang Big Data Lab, said, "A polarization phenomenon will occur, with demand concentrating mainly on subscriptions in key areas."

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