[Real Estate Finance] Challenging Pre-Subscription for 30s... Concentration on Mid-Low Priced Apartments and Villas

30s Struggle to Win Pre-Subscription Lottery, Flock to Mid-Priced Complexes on Seoul Outskirts
Increasing Trend of 30s Seeking Affordable Villas
If Subscription Is Difficult, Consider Smart Purchase

Although the pre-sale of apartments in the third phase of new towns and other metropolitan areas has been in full swing, apartment prices in major areas of Seoul and Gyeonggi Province continue to soar, leaving the anxiety of young people in their 30s dreaming of owning a home hardly alleviated. While the government is working to ease anxiety by expanding pre-sale subscriptions, experts suggest that young people, for whom winning a pre-sale subscription is practically difficult due to reasons such as marriage, income, and residence, may need to consider making wise purchases.

According to the monthly apartment transaction status from the Korea Real Estate Board, the proportion of apartment purchases by people in their 30s remains high this year. In June alone, there were 4,240 apartment sales in Seoul (based on the reporting date), of which 1,491 (35.16%) were by people in their 30s, the highest proportion among all age groups. In Gyeonggi Province, among 15,131 transactions during the same period, 4,311 (28.49%) were by people in their 30s, ranking first.

The government announced pre-sale plans last year and expanded the target to quell this 'panic buying' by people in their 30s, but it appears to have been insufficient to calm the buying frenzy among young people in the first half of this year. Experts explain that if pre-sale subscriptions are used well, it is possible to secure a home in a good location close to Seoul at a relatively affordable price, but they advise carefully assessing the chances of winning and planning home purchases wisely.

In fact, after the competition rates for special supply and newlywed hope town local area subscription applications for the first pre-sale on the 3rd, including Incheon Gyeyang, were disclosed, young people living in Seoul have voiced that winning is not easy. Due to the nature of pre-sale subscriptions, where a significant portion of units are preferentially supplied to residents of the local area, Seoul residents with low points inevitably have fewer opportunities. Moreover, those who are not planning to marry cannot expect to apply for newlywed hope towns or special supply (teukgong), which account for half of the units.

As a result, it is analyzed that the buying frenzy of people in their 30s is concentrating in outer areas with many mid-to-low priced apartment complexes. According to statistics from the Korea Real Estate Board, the proportion of purchases by people in their 30s was high in relatively affordable areas such as Seodaemun-gu (52.2%), Seongbuk-gu (51.0%), Gangseo-gu (50.6%), Nowon-gu (49.1%), and Jungnang-gu (48.4%). For dual-income couples and others with high incomes who do not benefit from special pre-sale supply, it may be advantageous to target relatively affordable small apartments in the outskirts that are convenient for commuting.

Those in their 30s with insufficient funds also sometimes choose villas instead of apartments. According to a survey by the real estate platform Dabang, among 43,444 single-family, multi-family, and row houses sold in Seoul in the first half of this year, people aged 30 and under purchased 10,678 units, accounting for 24.6% of the total. Compared to last year, the purchase proportion of people in their 30s increased by 3.1 percentage points. Meanwhile, the proportions for people in their 40s and 50s decreased by 0.3 and 2.1 percentage points, respectively. The non-apartment purchase proportion was particularly concentrated in well-located areas such as Mapo-gu (35.4%), Yongsan-gu (34.2%), and Yangcheon-gu (31.9%).

Although villas and similar housing types are less preferred than apartments, they continue to be chosen by young people due to their affordable prices and lower regulations. A Dabang official explained, "It appears that housing demanders in their 20s and 30s with insufficient funds purchased alternative housing products such as villas," adding, "Although less competitive than apartments in terms of product, interest was focused on non-apartment properties near urban centers with locational competitiveness."

The recent sharp rise in apartment jeonse (long-term lease) prices is also a factor that makes people hesitate to wait for subscription opportunities. Ko Jong-wan, director of the Korea Asset Management Research Institute, said, "Pre-sale subscriptions may somewhat influence buying sentiment, but fundamentally it will be difficult to suppress buying demand," adding, "It is unrealistic to expect a significant reduction in 'all-in' or panic buying demand."

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