Seoul Housing Subscription Competition Rate Doubles in One Year... Breaking All-Time Records?

Rising Housing Prices, Preference for New Buildings, and Prime Properties Drive Overheating in Seoul Only... 139 to 1 So Far

Gangnam Area Sales Continue in Second Half
"Competition Rate May Rise Compared to Blind Subscription Period"

The rising heat of apartment prices in Seoul is spreading to the subscription market. This year's average subscription competition rate is more than twice as high as last year's. It is close to the level of 2021, when the 'blind subscription' frenzy occurred. There is also a possibility of breaking the all-time high record. A series of supply volumes are scheduled in the Gangnam area, which is considered a prime location. Experts pointed out that the overheating phenomenon in subscriptions could shift to buying sentiment, creating a vicious cycle that stimulates housing prices again.

According to real estate information company Real Estate R114 on the 20th, the average subscription competition rate for first and second priority in Seoul from January this year to the 14th was 139.97 to 1. Considering that the subscription competition rate in the metropolitan area, including Seoul, was only 21 to 1 this year, Seoul's subscription market is showing signs of overheating. Compared to last year's average subscription competition rate of 57.36 to 1, it is more than twice as high. The previous highest record was 164.13 to 1 in 2021.

The subscription market has heated up in connection with the rise in apartment prices in Seoul. Yoon Ji-hae, chief researcher at Real Estate R114, said, "The subscription market and housing prices are originally not separate but have a symbiotic relationship," adding, "Since the beginning of this year, apartment prices have continuously risen, reviving buying sentiment, and demand has concentrated on subscription volumes that are cheaper than surrounding market prices due to the price ceiling system." In 2022, when housing prices fell significantly, the subscription competition rate was only 10.9 to 1.

The increased demand for new apartments has also raised the competition rate. Kwon Il, research team leader at Real Estate Info, said, "Two years ago, the preference for new apartments was not this strong," noting, "Recently, due to rising construction costs increasing the burden, people prefer new apartments with more pleasant living environments over older apartments for reconstruction."

Meanwhile, competition has become fiercer as prime supply volumes in the Gangnam area have increased. The Gangnam 3 districts are subject to the price ceiling system and are popular in terms of location, resulting in high competition rates. According to the Korea Real Estate Board's Subscription Home, among the 17 complexes supplied in Seoul this year, 5 were in the Gangnam 3 districts (Seocho, Gangnam, Songpa). Last year, there was no supply in the Gangnam 3 districts among 33 complexes. The same was true in 2022.

Supply in the Gangnam area will continue for the rest of this year. In Seocho-gu, 'Raemian One Perla,' a reconstruction of Bangbae 6 district, and 'Acro Ritz County,' a reconstruction of Bangbae Samik, are scheduled for supply. In Songpa-gu, 'Jamsil Raemian I-Park,' a reconstruction of Jamsil Jinju, will be supplied.

If these volumes raise the competition rate, there is a possibility of recording the highest competition rate ever this year. This means the subscription frenzy of 2021, when people applied blindly without worrying about financial capacity, could be reproduced. At that time, the average subscription competition rate was 164.13 to 1. Researcher Yoon said, "Last month, 130,000 people flocked to Raemian One Pentas, but only 300 general supply units were resolved. That demand could continue to flock whenever supply volumes come out in the Gangnam area."

There are also concerns that the high subscription competition rate could drive housing prices up again. Researcher Yoon predicted, "People with low subscription scores might find it better to move to semi-new apartments rather than waiting for supply," adding, "If demand shifts, it can raise the prices in that market."

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