Apartment Profit of 1.5 Billion Won from 300 Million Won Cash... Investment or Speculation?

DH Jaigaepo Non-Sequential Subscription Frenzy Forecast

View of apartments in Seoul and Gyeonggi-do from Seoul Tower

"If you have just 300 million won in cash, you can make 1.5 billion won. Somehow, gather 300 million won first, even if it means borrowing from distant relatives."

On the 11th, a non-priority subscription was held for the ‘DH Zai Gaepo’ apartment in Irwon-dong, Gangnam-gu, Seoul, sparking growing controversy over speculation due to excessive price gains.

The units available for subscription that day were a total of 5: one 84㎡ (exclusive area) unit and four 118㎡ units. This apartment, which has already completed reconstruction and started move-ins at the end of last month, has a sale price of 1.4176 billion won for the 84㎡ units and 1.8878 billion won for the 118㎡ units. Meanwhile, the average market price for the 84㎡ units is about 3 billion won. This means the immediate price gain is at least 1.5 billion won.

In particular, this apartment has no occupancy obligation, and the jeonse (long-term deposit lease) price is about 1.4 billion won (for 84㎡), so by paying only about 300 million won as a deposit (for 84㎡), the remaining funds can be covered by renting it out. Regardless of whether one has a subscription savings account, any non-homeowner residing in Seoul can apply, so it is expected that not only actual demand but also investors will flock in large numbers.

As a result, some voices are growing critical that the government’s excessive sale price and loan regulations are encouraging speculation. Apartments priced over 900 million won are barred from group loans for interim payments, and homes with market prices exceeding 1.5 billion won are completely banned from mortgage loans. Yet, for an apartment with a market price of 3 billion won, the government has opened the door to ‘legal gap investment.’

Homeowners argue that limiting the opportunity for a 1.5 billion won price gain to non-homeowners residing in Seoul is unfair. Above all, they question how aiming for a 1.5 billion won price gain with just 300 million won is any different from speculation. On an internet community, criticism has been raised asking, "Is the price gain by non-homeowners investment, but by homeowners speculation?"

Experts pointed out that instead of piling regulation upon regulation and distorting the market, market autonomy should be enhanced. Seo Jin-hyung, president of the Korea Real Estate Society (professor at Gyeongin Women’s University), said, "The current market situation inevitably raises questions about what is justice," adding, "Given the significant social costs caused by lottery subscriptions and various regulations, active exploration of measures such as easing regulations to reduce market distortion is necessary."

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