560,000 Applicants for Gwacheon Designated Lottery, 'Pangyo D?j? Vu'?... Growing Controversy Over Subscription Windfall Profits

[Asia Economy Reporter Kim Yuri] Over 560,000 subscription accounts flooded the pre-sale of three apartment complexes in the Gwacheon Knowledge Information Town in Gyeonggi Province, intensifying the controversy over unearned income triggered by the government's price control on pre-sale prices. The average first-priority subscription competition rate for these apartments reached up to 535 to 1 per complex, leading to analyses comparing it to the d?j? vu of the 2006 Pangyo New Town subscription frenzy. Considering the Pangyo case, where the 'lottery subscription' ultimately resulted in market price tracking, voices are growing for the establishment of appropriate mechanisms to recover speculative gains.

According to the Korea Real Estate Agency's subscription homepage on the 4th, Gwacheon Prugio Ortus, which held its first-priority subscription the previous day, attracted 102,693 applicants for 192 households, resulting in an average competition rate of 534.9 to 1. This is not only the highest competition rate in Gwacheon City but also ranks fourth nationwide since 2002, according to Real Estate 114's records. Composed solely of small to medium-sized units supplied entirely through a point-based system, the 84㎡ (exclusive area) B-type apartment saw its competition rate soar to 1,812.5 to 1. Applicants residing in 'Other Gyeonggi' for this housing type faced a competition rate of 5,219 to 1 to win. The other two complexes also recorded first-priority average competition rates exceeding 400 to 1. Gwacheon Prugio Eoullim Lavieno, with 458 households, received 190,409 applications, resulting in a 415.7 to 1 competition rate, while Gwacheon Lesento Desiang, with 394 households, had 185,288 applicants, recording a 470.3 to 1 competition rate.

This subscription overheating is due to expected speculative gains reaching up to 1 billion KRW, driven by the application of the pre-sale price ceiling system. Additionally, half of the supply includes units over 85㎡ allocated by lottery, attracting low-score applicants and one-homeowners.

The total of 560,000 subscriptions recorded by these three complexes is an unprecedented figure in the subscription market, as simultaneous sales allowing multiple subscriptions are rare. Experts unanimously agree that this exemplifies the increasingly intense subscription overheating phenomenon. Even when divided by complex, each attracted between 102,693 and 190,409 applicants, surpassing the 174,818 applicants for the Botdeul Village 1 complex in Pangyo New Town in 2006, which recorded the highest average competition rate (682.9 to 1) in history. At that time, this complex, the first private apartment sale in East Pangyo, saw a competition rate of 2,074 to 1 among 82㎡ applicants from Seongnam and other metropolitan areas. The pre-sale price was 11.9 million KRW per 3.3㎡, amounting to 393 million KRW for a third-floor unit, but last month it was reported sold at 1.4 billion KRW. This represents a 3.5-fold increase over 11 years since moving in (2009), rising by over 1 billion KRW. This case demonstrated that the government's logic of 'stabilizing surrounding house prices downward through low pre-sale prices' cannot function properly.

Experts pointed out that since the full implementation of the pre-sale price ceiling system, the heightened subscription fever, 'lottery gains' benefiting only some buyers, the relative deprivation felt by unsuccessful applicants, and the vicious cycle of turning to the existing stock housing market must be improved. A redevelopment project official said, "Currently, subscription participants not only expect lottery-like gains but also face lottery-like chances of winning. While a few winners hope it might be them, the probability is very low. We need to consider the fundamental structural problems causing this."

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