"Buy Before It Rises More"... No.1 Subscription Competition Rate Exceeds 12 to 1

'Indeogwon Purseubiel', 10:1 Competition Rate Despite High Sale Price Controversy
Buyers Expecting Price Increase Enter Subscription Market
Private Apartment Sale Prices at End of April Up 9.6% Compared to One Year Ago

Some complexes in the Seoul metropolitan area are successfully attracting buyers despite controversies over high sale prices. This is attributed to the recovery of real estate buying sentiment due to government regulation easing, as well as buyers using subscription savings accounts based on the expectation that sale prices will rise further due to increases in raw material costs and high interest rates.

[Image source=Yonhap News]

According to the Korea Real Estate Board's Subscription Home on the 13th, the first-priority subscription for 'Indeokwon Purseubiel' in Naeson-dong, Uiwang, Gyeonggi Province, held on the 31st of last month, attracted 3,043 applicants for 303 units, recording a competition rate of 10 to 1. All units of 84㎡ exclusive area in this complex were located on low floors (1st to 4th floors), and the sale prices ranged from 1.014 billion to 1.079 billion KRW, sparking controversy over high prices. Despite being outside Seoul and having high prices, it defied expectations of poor subscription results and is considered to have performed relatively well.

The 'Gwangmyeong Xi The Sharp Forena' in Gwangmyeong, Gyeonggi Province, which was offered on the 4th of last month, saw 4,422 applicants for 422 units in the first-priority subscription, resulting in an average competition rate of 10.48 to 1. Although the sale price for the 84㎡ exclusive area ranged from 897.5 million to 1.0455 billion KRW, which was perceived as expensive, it also succeeded in attracting buyers.

The Indeokwon Xi SK View, which was offered in September last year, had a poor performance during the unordered subscription in October last year, with only 6 applicants for 508 units. However, the atmosphere has changed this year. Recently, units of ▲59㎡B and ▲74㎡A·B·C have been contracted, gradually reducing the unsold inventory.

The increasing number of buyers knocking on the subscription market door despite soaring sale prices is also confirmed by statistics. The nationwide average first-priority subscription competition rate was 5.26 to 1 in January, dropped to 4.62 to 1 in March, recovered to 7.60 to 1 in April, and rose to 12.04 to 1 in May. The competition rate more than doubled in just four months. This appears to be because buyers, anticipating continuous price increases due to rising construction costs from raw material price hikes and high interest rates, are flocking to the new sale market despite the burden of high prices.

According to the Housing and Urban Guarantee Corporation (HUG), as of the end of April, the nationwide average sale price for private apartments was 15.9852 million KRW per 3.3㎡, up 9.62% compared to the same month last year. In particular, prices in provincial areas rose by 14.45% during the same period, significantly exceeding the national average increase.

There are also forecasts that sale prices will rise further. This is because an additional increase in cement prices, a major cause of rising construction costs, is almost certain. Ssangyong C&E, the industry leader, announced a 14% price increase starting next month, followed by Sungshin Cement joining the price hike trend.

On the other hand, considering that the subscription market atmosphere is recovering in the metropolitan area but remains sluggish in provincial areas, and that success depends on location and price competitiveness, there are also forecasts that construction companies will find it difficult to insist on high sale prices unconditionally.

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