Pre-Subscription on the 28th... Resident Preference Requirements Stir Nearby Jeonse Market

[Asia Economy Reporter Kim Hyemin] As the third phase of pre-subscription for new towns begins this week, the jeonse prices in nearby areas are fluctuating. This is due to the surge in demand as residents of the respective areas are given priority subscription opportunities. Amid concerns that measures aimed at stabilizing the real estate market are instead shaking the jeonse market, the unstable trend is expected to continue until the main subscription.

According to the Ministry of Land, Infrastructure and Transport on the 26th, pre-subscription applications for apartments on public land in the metropolitan area, including the third phase new towns, will begin with special supply on the 28th. Priority subscription for first-priority applicants such as residents of the respective areas is scheduled for the 4th to 5th of next month, and second-priority subscription for all areas is planned for the 11th of the same month. The pre-subscription targets by district are △Namyangju Jinjeop 2 District with 1,535 households △Incheon Gyeyang District with 1,050 households △Seongnam Bokjeong 1 District with 1,026 households △Wirye New Town with 418 households △Uiwang Cheonggye 2 District with 304 households, totaling 4,333 households. Among these, only Incheon Gyeyang District is included as a third phase new town.

Despite this pre-subscription aimed at stabilizing the metropolitan real estate market, movements in the nearby jeonse and monthly rent markets are unusual. Since the subscription gives preference to residents of the respective areas, the number of people relocating to subscription areas to increase their chances of winning has surged.

In fact, in the case of Incheon Gyeyang District, 50% of the total supply is preferentially allocated to those residing in Incheon as of the pre-subscription announcement date. The remaining 50% is supplied to residents of the metropolitan area such as Gyeonggi-do and Seoul, and residents of other regions are given opportunities only if the supply is undersubscribed. Apartments in Seongnam Bokjeong 1 District and Uiwang Cheonggye 2 District are all under 60㎡ (exclusive area), so the entire supply is preferentially allocated to residents of Seongnam City and Uiwang City, respectively.

As jeonse demand in these areas surged, prices also rose accordingly. According to KB Kookmin Bank’s Liv Real Estate, jeonse prices in Namyangju City, where the first pre-subscription districts are located, jumped 40.3% over one year. Seongnam City also saw an increase of about 36.2%. The price of an 85㎡ unit in Gyeyang Hanyang Sujain in Incheon Gyeyang-gu soared from the mid to high 400 million KRW range to recently 600 million KRW during the same period. Hanam, Gyeonggi-do, where pre-subscription is scheduled for November, recorded the highest increase nationwide with a 49.8% rise over one year.

As demand concentrates on the nearby jeonse market like this, there are concerns that even those who must inevitably move to the area due to child-rearing issues are suffering collateral damage. The policy choice of pre-subscription, intended to suppress real estate buying sentiment early, is instead stimulating the jeonse market and producing unintended victims.

The confusion is expected to continue until the main subscription scheduled two years later. Those who win in the pre-subscription must fulfill a maximum two-year residence period until the main subscription’s resident recruitment announcement. Ham Young-jin, head of the Zigbang Big Data Lab, said, "Due to reasons such as the third phase new towns, many people are trying to maintain their non-homeownership period, so demand continues," adding, "Prices are bound to be stimulated for the time being."

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