Bunsangje 發 'Lotto Subscription' Spreads Across Various Parts of the Seoul Metropolitan Area

Byeollae Jaideoseuta 1st Priority Average Competition Rate 203.3 to 1
99㎡ Type B at 289.1 to 1
70% of Supply Allocated by Lottery
Low Sale Price with 50% LTV
High Demand from Low Score Applicants

Perspective view of Byeollae Xi The Star supplied by GS Construction

[Asia Economy Reporter Donghyun Choi] The 'lottery subscription' phenomenon caused by price ceiling regulations is spreading across the Seoul metropolitan area. Over 80,000 applicants flocked to the first-priority subscription for a residential-commercial complex apartment supplied in Namyangju City, Gyeonggi Province.

According to the Korea Real Estate Agency's subscription homepage on the 28th, the first-priority subscription results for 'Byeollae Xi The Star' in the Byeollae District of Namyangju the previous day showed that 85,593 people applied for 421 households, recording an average competition rate of 203.3 to 1. This complex is a residential-commercial complex consisting of 5 buildings with 740 households, ranging from 3 basement floors to a maximum of 46 floors above ground, located in the 999 area of Byeollae-dong.

The highest competition rate was seen in the 99㎡ (exclusive area) B type. For 116 households, 33,537 people applied, showing a competition rate of 289.1 to 1. In the relevant area (1-year residence in Namyangju), 4,605 subscription accounts were submitted, while 14,171 people applied from other parts of Gyeonggi Province (residents with over 6 months residence in Gyeonggi), and 14,761 applied from other regions (residents of Seoul, Incheon, and those with less than 6 months residence in Gyeonggi). Since 70% of the total supply for this housing type is decided by lottery, many applicants with low scores likely applied. Considering that 30% of the general supply is preferentially allocated to the relevant area through a lottery, and if unsuccessful, 20% is combined with other Gyeonggi applicants, and the remaining 50% is competed for again by unsuccessful applicants from the relevant area and other Gyeonggi, the competition rate for other regions reaches 814 to 1.

The main reason for such high competition rates is analyzed to be the application of the price ceiling system, which set the sale price much lower than the surrounding market prices. Since Namyangju is a regulated area, a relatively high 50% loan-to-value ratio (LTV) was applied for mortgage loans compared to speculative overheated districts, which also seems to have influenced the demand. Winners are prohibited from reselling their pre-sale rights until move-in and are restricted from winning again for 10 years.

Besides this complex, subscription overheating continues in recently price-ceiling-applied apartments, pushing winning cut-off scores higher. For example, 'Seocho Xi Rene' in Seocho-dong, Seocho-gu, Seoul, which was recently sold under the price ceiling system, received 10,507 applications for 35 households in the first-priority subscription, recording an average competition rate of 300.2 to 1, with the average winning score reaching 66.2 points. Similarly, 'Godeok Artes Misojium' in Sangil-dong, Gangdong-gu, also a price ceiling apartment, recorded an average competition rate of 537.1 to 1 with 13,964 applicants for 26 households in the first-priority subscription on the 21st. This is the highest first-priority competition rate ever recorded in Seoul. The sale price per 3.3㎡ was 25.69 million KRW, with the highest 84㎡ priced at 866 million KRW. Considering that the market price of the nearby 'Godeok I-Park' 84㎡ is between 1.5 to 1.6 billion KRW, this is almost half the price.

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