Even Within Cheonan, 'Hundreds to One vs. Undersubscribed'... "Beware of Regional Subscription Polarization"

[Asia Economy Reporter Yuri Kim] With the prohibition of resale of pre-sale rights in the metropolitan area and major provincial cities, investors' attention is shifting to the subscription market in non-regulated areas where there are favorable conditions. However, concerns have been raised that even within the same region, a clear polarization phenomenon in subscriptions is emerging, requiring caution in investment.

According to the real estate industry on the 14th, polarization in local subscriptions is being confirmed as complexes with competition rates of hundreds to one and some undersubscribed complexes appear simultaneously in the new pre-sale market in Cheonan City, Chungnam Province.

Cheonan Sinbang Sambur Renaissance in Sinbang-dong, Dongnam-gu, Cheonan City, which recently held a subscription, saw about half of the total supply in all types of 59㎡ (exclusive area) remain unsold up to the second priority, leading to ongoing non-priority applications. This complex recorded an average competition rate of 1.6 to 1, with 75㎡ and 84㎡ closing at competition rates of 1.01 to 1 and 8.92 to 1 respectively in the first priority local area, but undersubscription occurred in the 59㎡ units.

This result is completely different from the subscription results of 'Cheonan Prugio Lakeside' in Seongseong-dong, Seobuk-gu, Cheonan, which was pre-sold in August. Cheonan Prugio Lakeside closed the first priority subscription with an average competition rate of 131 to 1, the highest subscription competition rate nationwide except for the metropolitan area and major provincial cities this year. Since resale of pre-sale rights is allowed immediately after contract, pre-sale right listings appeared on the market right after contracts were signed. Currently, there are 57 listings on Naver Real Estate, and the pre-sale right premium is formed at around 200 million KRW for 84㎡ units. The second highest subscription competition rate also came from Cheonan. 'Administrative Town Central Doosan We’ve' in Cheongdang-dong, Dongnam-gu, which held subscriptions last month, showed an average competition rate of 63.68 to 1. Despite Cheonan City recently establishing a '6-month residence' requirement for the first priority in the area, these two complexes attracted a large number of applicants and drew attention.

Cheonan has become a place where a price reflection effect appeared as most areas in the metropolitan area and nearby Daejeon and Cheongju were designated as real estate regulation areas under the June 17 real estate measures. It was also influenced by the price surge in Sejong and Daejeon spreading to the outskirts. Especially, demand concentrated on newly built apartments in new towns with good living conditions such as transportation and education, causing prices to soar. Apartment prices in Cheonan have maintained a rise rate of over 1% in July (1.51%), August (1.22%), and last month (1.14%).

Cheonan attracted attention as a non-regulated area not included in the strengthened resale restrictions. Although the revised Housing Act Enforcement Decree, which strengthened resale restrictions on pre-sale rights for new apartments applying for pre-sale after the 22nd of last month, was implemented, the targets were the metropolitan area’s overconcentration control zones, growth management zones, and major provincial cities, so Cheonan was excluded. However, price increases were minimal in areas outside the new town. The industry views the contrasting subscription results as confirming the gap between notable and less notable areas.

Experts pointed out that from next year, pre-sale rights will be included in the housing count, and areas where demand surged in a short period causing rapid price increases are likely to experience short-term declines due to government regulations, so caution is necessary. Previously, Cheongju also saw apartment prices surge after the confirmation of the synchrotron accelerator project in May, but after being included in the regulation area under the June 17 measures, the upward trend slowed and turned to a correction in September. Kyunghee Yeo, Senior Researcher at Real Estate 114, advised, "There are temperature differences by location even within the same area, and if entered for short-term speculation, funds may be trapped, which can be risky. Unless for actual residence demand, 'blind subscription' should be avoided."

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