Supply Shortage Reality Approaching... Jeil Construction's 'Jeil Punggyeongchae Okjeong' First-Come, First-Served Contracts

by Jung Jin

Published 16 May.2024 10:10(KST)

[Jeil Punggyeongchae Okjeong Perspective View]

The domestic construction and building orders in the first quarter of this year recorded the lowest level in 10 years. As soaring construction costs make construction companies reluctant to bid for domestic apartment projects, concerns about supply shortages are growing.

According to the Korea Construction Association, the total domestic construction (civil engineering, building, etc.) orders in the first quarter of this year amounted to 34.2212 trillion KRW, a 28% decrease compared to the same period last year. In particular, private sector orders sharply dropped by 36.2% to 22.2121 trillion KRW during the same period.

Looking in detail, the residential building orders by domestic construction companies totaled 10.9592 trillion KRW. This figure falling below 11 trillion KRW is the first time in about 10 years since the second quarter of 2014 (10.4016 trillion KRW). New housing projects as well as reconstruction and redevelopment projects have all frozen.

An industry insider said, “Labor and material costs have risen too much, and due to real estate PF risks, financing is also difficult. Unless the project’s sale price supports appropriate construction costs, it is impossible to secure orders.”

Given this situation, concerns about housing price instability due to future supply shortages are also increasing. Even if permits are granted, if orders are not secured, it cannot lead to housing supply. If orders continue to remain sluggish as they are now, the risk of supply shortages becoming a reality is high.

Amid the busy movements of buyers rushing to secure their own homes before supply shortages drive up housing prices, rental apartments are gaining renewed attention. In today’s high-interest-rate era, buying a home is burdensome, and with growing anxiety over jeonse fraud issues, interest is focusing on real estate products that allow stable long-term residence.

In Gyeonggi Province, it is reported that inquiries are continuing for ‘Jeil Punggyeongchae Okjeong,’ launched by Jeil Construction in the Okjeong-dong area of Yangju City. The complex is being developed with a total of 1,304 households ranging from 64 to 84 square meters of exclusive area, and special supply contracts (for newlyweds, youth, elderly) for some remaining units are underway on a first-come, first-served basis with designated unit numbers.

‘Jeil Punggyeongchae Okjeong’ is a publicly supported private rental housing that allows stable residence without moving stress for up to 10 years through contract renewals every two years. The rental deposit is guaranteed by the Housing and Urban Guarantee Corporation (HUG), boasting high stability.

For initial rent, special supply applicants are offered units at 85% or less of the surrounding market price. Even after moving in, increases in rental deposits and monthly rent are limited to within 5% per year, reducing economic burden. Since these units are not included in the housing count, there is no tax burden such as acquisition tax or property tax.

Jeil Construction is also gaining favorable responses from buyers by offering rent-free discount benefits. This refers to a standard rental type condition providing monthly rent discounts until January 31, 2025. Since ‘Jeil Punggyeongchae Okjeong’ is ready for immediate move-in, the sooner residents move in, the greater the benefits they can receive.

‘Jeil Punggyeongchae Okjeong’ also boasts an excellent location. Situated in Yangju New Town, the largest scale in the northeastern metropolitan area, residents are expected to enjoy high-quality infrastructure such as transportation, education, and convenience facilities.

First, the safe school district location stands out, with Okbit Elementary School (including attached kindergarten), Okbit Middle School, and Okbit High School located right in front of the complex. Yulbit Elementary School, Yeonpureun Elementary School, and a cluster of private academies are also within walking distance. Jeil Construction offers a 20% discount at the Plutonvis Language Institute located within the complex to residents, attracting strong interest from parents.

The administrative welfare center (planned) is nearby, and it is easy to use facilities such as the movie theater (CGV) in the central commercial area around the complex. Adjacent to the complex is a park that connects to Okjeong Central Lake Park, and natural environments such as Cheonbosan Mountain, Seondol Neighborhood Park, and Dokbawi Park are nearby, promising a pleasant residential environment.

Additionally, major transportation developments such as the extension of Subway Line 7 to Okjeong Station (planned), GTX-C Line (planned), Deokjeong Station on Line 1, and the Metropolitan Area 2nd Ring Expressway (planned) are nearby, significantly improving access to Seoul.

The sales office is located on the first floor of Building 314 of ‘Jeil Punggyeongchae Okjeong’ and operates from 10 a.m. to 5 p.m.