When the Public Sale Price Increases by 100,000 KRW per 3.3㎡, the Private Sale Price Rises by 1.53 Million KRW

This year, the sale price of public sale apartments increased by 100,000 KRW per 3.3㎡ compared to last year, while private sale prices rose by 1.53 million KRW. Since 2021, the price increase for private sales has been significant, whereas for public sales, the application of estimated sale prices in pre-sale complexes has led to more conservative pricing, resulting in a widening gap, according to analysis.

[Image source=Yonhap News]

On the 15th, Real Estate R114 surveyed the average sale price per 3.3㎡ of public and private sale apartments sold this year in the metropolitan area. Public sale apartments averaged 14.69 million KRW, and private sale apartments averaged 19.7 million KRW. The public sale apartment price rose by 100,000 KRW from 14.59 million KRW last year to 14.69 million KRW, while private sales increased by 1.53 million KRW from 18.17 million KRW to 19.7 million KRW during the same period.

The average price gap between public and private sale apartments was 5.01 million KRW per 3.3㎡. Unlike public sales, where price fluctuations were minimal, private sale prices have risen sharply since 2021. Construction costs, financial expenses, and land acquisition costs have steadily increased, and the large-scale deregulation of metropolitan area zones in November last year and January this year reduced the scope of price ceiling regulations and the Housing & Urban Guarantee Corporation (HUG)'s high-price review targets, which are understood to have driven the price increase of private sale apartments.

The rise in average private sale apartment prices in the metropolitan area is largely attributed to price increases in the Gyeonggi region. In January, the post-sale apartment Pyeongchon Centum First in Anyang City was sold at around 1 billion KRW for an exclusive area of 84㎡ (based on the initial sale price), and last month, Guri Station Lotte Castle Signature in Guri City set a new highest sale price in the area.

In Seoul, the average sale price rose significantly last year due to projects such as Jamsil The Sharp Ruben and The Sharp Songpa Lumista in Songpa-gu remodeling projects, and Mapo The Classy in Mapo-gu supplied through post-sale. However, this year, new sale complexes in Yeongdeungpo and Eunpyeong-gu set relatively lower prices compared to nearby market prices, resulting in a 16% decrease from last year's prices. In Incheon, the average sale price was high early this year due to last year's sale in Songdo International City (not subject to the price ceiling system), but showed a slight decline recently.

[Image provided by Budongsan R114]

With increased sensitivity to sale prices due to financial cost burdens, public sale apartments with excellent locations and lower initial capital burdens performed well. Last month, the average competition rate for pre-sale public apartments in Goyang and Namyangju, Gyeonggi Province, was 28 to 1 (based on general supply). In March, SH (Seoul Housing Corporation) supplied ‘Godeok Gangil 3 Complex’ which recorded a competition rate of 67 to 1. With the easing of resale restrictions on public land in the metropolitan area expected this month, interest in new public sale complexes is anticipated to increase further.

Real Estate R114 stated, “With the unavoidable additional increase in basic construction costs, complexes conducted through pre-sale are likely to have their final sale prices adjusted at the main sale stage. It is necessary to consider uncertainties regarding move-in timing and capital gains after the residence period. Especially for new types of public housing such as land lease sale housing, applicants should carefully review important details such as monthly land lease fees and repurchase conditions before applying.”

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