First Seoul 500-Unit Housing Sale This Year, No Undersubscription... "Need to Watch Main Contracts"

'Riversen SK View Lotte Castle' First Priority Local Recruitment
Average Competition Rate 6.22 to 1... Highest Competition Rate 25 to 1

'Riverseon SK VIEW Lotte Castle' Rendering/Photo=Riverseon SK VIEW Lotte Castle Sales Website

[Asia Economy Reporter Hwang Seoyul] This year, for the first time in Seoul, a large complex with over 500 units offered for sale saw more applicants than the number of units available in the first-priority local subscription, avoiding an undersubscription situation. However, some point out that with the continued decline in housing prices, it remains uncertain whether full sales will be achieved at the final contract stage.

According to Subscription Home on the 16th, the first-priority subscription results for ‘Riversen SK VIEW Lotte Castle’ in Jungnang-gu, Seoul, held the previous day, showed 2,090 applicants competing for 336 units, recording an average competition rate of 6.22 to 1. The housing types with the highest competition rates were 49.99A㎡ and 49.97B㎡, both showing a 25 to 1 ratio.

Previously, industry insiders expressed mixed opinions that despite being a large complex released in Seoul after a long time, it would be difficult to expect ‘lottery-like’ competition rates. This was due to the real estate downturn and the relatively high sale prices compared to nearby apartment transaction prices. The complex’s 84㎡ units are priced between a minimum of 883 million KRW and a maximum of 979.2 million KRW, while the 100㎡ units range from 1.0927 billion KRW to 1.1881 billion KRW. Compared to the nearby Mukdong I-Park’s 84㎡ unit, which was traded at 890 million KRW in June, and the 101㎡ unit sold for 900 million KRW in April, the sale prices do not offer a significant advantage.

Moreover, the 84㎡ units fall under the current mid-term loan regulation threshold of 900 million KRW in sale price, which seems to have limited the competition rate to single digits. For the 84㎡ units, housing type A recorded a 6.94 to 1 ratio, B 3.06 to 1, C 1.75 to 1, and D 3.22 to 1.

On the 27th of last month, the government announced plans to expand the mid-term loan guarantee threshold from 900 million KRW to 1.2 billion KRW to ease difficulties for actual buyers in securing homes and moving residences, but this is expected to be implemented next month. This likely influenced buyer sentiment, as the policy may not apply to this complex. However, according to the Ministry of Land, Infrastructure and Transport, even if the complex’s recruitment announcement was made before the mid-term loan guarantee threshold expansion, if mid-term collective approval was obtained afterward, the new regulations can be applied.

Park Jimin, head of the Monthly Subscription Research Institute, said, "If the market were good, buyers might optimistically consider the possibility of applying to this complex, but under current circumstances, sentiment may act negatively. Also, with the Dunchon Jugong supply scheduled next month, buyers may have decided to try their luck there instead."

Although full subscription was achieved for this complex, some analyses suggest that the final contract stage should be observed carefully. If the prices of existing apartments in Seoul continue to fall during this real estate downturn, the advantage of the sale price will further diminish. Song Seunghyun, CEO of City and Economy, said, "The sale prices in Jungnang-gu are quite high, and from an investment perspective, the surrounding market prices are rapidly declining. When it comes to the final contract, some units may remain uncontracted."

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