Dunchon Jugong Average Contract Rate Nears 70%... 'Preliminary Winners' Are Key

Thanks to government deregulation, relatively good performance
but demand avoidance persists amid falling house prices

[Asia Economy Reporter Kim Hyemin] The subscription winner contract rate for Olympic Park Foreon in Gangdong-gu, Seoul (Dunchon Jugong Reconstruction) has shown relatively strong performance, supported by the government's regulatory easing. However, some unsold units are expected to be inevitable due to controversies over high pre-sale prices amid falling housing prices. The final unsold inventory returning to the market is expected to vary depending on the contract rate, including preliminary winners.

According to the sales industry on the 17th, the official contract rate for Olympic Park Foreon, conducted from the 3rd to this day, is known to be in the 60% range. A sales industry official said, "Although contracts were originally scheduled to be completed by 5 PM, last-minute contract signings are currently surging, so the contract deadline will be extended to between 7 PM and 9 PM," adding, "At the current pace, the contract rate is expected to approach 70%."

[Image source=Yonhap News]

The construction consortium and the association are considering this a relatively good result. A construction consortium official said, "When the subscription competition rate was announced, the prevailing view was that the contract rate would not even exceed 50%," adding, "Including contracts from preliminary winners, the final contract rate will easily reach 90%." Contracts for remaining units for preliminary winners will begin on the 9th of next month.

The reason Olympic Park Foreon’s official contract rate could reach nearly 70% appears to be largely due to the government's regulatory easing. During the first-priority subscription held in December last year, Olympic Park Foreon recorded a low competition rate of 3.7 to 1, with 13,647 applicants for 3,695 units.

However, the mood reversed when the government lifted regulatory designations for all of Seoul except four districts (Seocho, Gangnam, Songpa, Yongsan) earlier this month. Gangdong-gu, where Olympic Park Foreon is located, was also removed from the regulated areas, allowing mid-term loans for units over 84㎡, shortening the resale restriction period from 8 years to 1 year, and eliminating the 2-year mandatory residence requirement, thereby reducing the financial burden on subscription winners.

In particular, the timing of the government's regulatory easing coincided with the official contract reception date for Olympic Park Foreon, making all winners beneficiaries, which led to industry whispers calling it "Rescuing Private Dunchon Jugong." In fact, inquiries related to official contracts and pre-sale rights purchases surged significantly after the government's regulatory easing.

However, some critics argue that the contract rate is lower than expected given the government's complete deregulation. Initially, after the government's deregulation, there was optimism in the market that Olympic Park Foreon would sell out or exceed an 80% contract rate. But amid falling surrounding housing prices, controversies over high pre-sale prices, and the burden of loan interest, many winners gave up on contracts. Especially, while units of 59㎡ and 84㎡ exceeded a 70% contract rate, ultra-small units such as 39㎡ and 49㎡ reportedly had even lower contract rates.

The final contract rate, including preliminary winners, is expected to be confirmed through the non-priority subscription scheduled for next month. If the current 70% level is maintained, approximately 1,400 units will be available in the non-priority subscription, and if the contract rate rises to 90% as predicted by sales officials, about 400 units will be released back to the market. With significant deregulation of related rules for non-priority subscriptions, it is expected that complete sell-out will not be difficult. The government plans to revise housing supply regulations next month to allow homeowners to participate in non-priority subscriptions and remove residency requirements for non-homeowners.

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