[2020 Financial Weather Forecast] 'Lotto Subscription'... Demand Expected to Concentrate in Gangnam Area Including Dunchon Jugong and Gaepo

Price Caps Boost Market Gains... Flood of Supply in Gwangmyeong New Town

[Asia Economy Reporter Moon Jiwon] With the expanded implementation of the price ceiling on pre-sale prices, expectations for 'lottery subscription' have increased, and this year's pre-sale market is expected to continue the enthusiasm comparable to last year.

According to the real estate industry on the 3rd, the nationwide private construction industry's apartment pre-sale volume this year is estimated to reach about 325,000 households. Among them, the pre-sale volume in the metropolitan area is 184,253 households, accounting for more than half of the total volume. Compared to the pre-sale plan volume surveyed at the same time last year, it has decreased by 15.7%, and with the expected influx of 'lottery apartments' due to the price ceiling on private land, the metropolitan pre-sale market is expected to overheat.

Currently, the government has designated most major autonomous districts, including the Gangnam area of Seoul, as targets for the price ceiling on pre-sale prices, as well as cities such as Gwacheon, Gwangmyeong, and Hanam.

First, in Seoul, before the exemption period for the price ceiling on pre-sale prices ends on April 29, large-scale pre-sales will continue in redevelopment complexes in Gangbuk and Gangnam. The most notable is the Dunchon Jugong reconstruction in Dunchon-dong, Gangdong-gu, scheduled for April. It is a mammoth complex with a total of 12,032 households, with 4,841 households available for general pre-sale. The association expects a target price of 35.5 million KRW per 3.3㎡ for general pre-sale. Considering that the surrounding market price far exceeds 40 million KRW per 3.3㎡, a price difference of several hundred million KRW can be expected for an exclusive area of 84㎡.

The Heukseok 3 District in Dongjak-gu, scheduled for pre-sale in March, is also considered a popular subscription area in the first half of the year. Among 1,772 households, 364 households per month will be released for general pre-sale. Gaepo-dong Jugong 1 Complex (6,642 households) in Gangnam-gu is scheduled for October, and Yongdu 6 District Raemian (1,048 households) in Dongdaemun-gu is scheduled for general pre-sale in April. In addition, large volumes will be released in Susaek 6 (1,223 households), Susaek 7 (672 households), and Jeungsan 2 District (1,386 households) in Eunpyeong-gu, as well as Jangwi 4 District (2,840 households) in Seongbuk-gu.

The New Town area in Gwangmyeong City also attracts attention. Gwangmyeong New Town District 15 and District 2 in Gwangmyeong-dong are both scheduled for pre-sale within the year. District 15 Gwangmyeong Prugio Centville is a complex of 1,335 households, with 460 households for general pre-sale. District 2, expected to be generally pre-sold around November, is attractive with a complex size of 3,344 households.

In addition, new pre-sales are waiting in key metropolitan areas with excellent access to Seoul, such as Seongnam (Shinheung 2 District), Hanam (Hanam C District), and Namyangju (Donong 2 District). An industry official said, "Some volumes are expected to be adjusted next year due to the price ceiling on pre-sale prices," adding, "Due to concerns about supply contraction and expectations of rising house prices, most will record high subscription competition rates."