Last Month's 21 Unsold Apartments... Will Construction Companies' Performance Be Hampered?

[Asia Economy Reporter Ji Yeon-jin] Last month, 21 unsold housing units occurred nationwide, raising concerns that this could negatively impact construction companies' future performance.

According to NH Investment & Securities on the 20th, the number of first and second priority applicants nationwide in July was 64,000, a decrease of 83% compared to the same period last year. The subscription competition rate was 4 to 1. Including special supply, there were 21 sites nationwide where first and second priority subscriptions fell short, accounting for 43% of sites with no subscriptions. Unsold housing units were concentrated in local areas, with 13 in the Yeongnam region and 4 in the Honam region, including 1 in Gwangju.

Among the 21 unsold sites, 3 are being constructed by large companies.DL E&C is constructing ePyeonhansesang Samcheonpo Ocean Prime (Sacheon, Gyeongnam, 677 units), which recorded a relatively good subscription competition rate of 0.93 to 1. However, Hyundai Construction is constructing Hillstate Daemyeong Central Phase 2 (Dalseo-gu, Daegu, 977 units) and Hillstate Seodaegu Station Central (Seo-gu, Daegu, 762 units), which recorded subscription competition rates of 0.25 to 1 and 0.14 to 1, respectively.

Minjae Lee, a researcher at NH Investment & Securities, said, "Even large sites in the Daegu area constructed by large companies with brand power show low initial subscription competition rates," adding, "While additional units will be recruited during construction, there is a possibility that profitability will be damaged due to discounted sales."

Last month, the top 10 large companies recorded sales of 5,000 units, with the regional supply distribution being 42% in the Yeongnam region and 22% in the Chungcheong region, while there were no sites supplied by large companies in the metropolitan area and Honam region.

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