160,000 People Flocked to 'Maegyo Station Prugio SK View' Before Regulation Deadline

Average Competition Rate for First-Priority Subscription on the 19th: 145.7 to 1
Massive Influx of Subscription Accounts Due to Short Resale Restrictions

[Asia Economy Reporter Lee Chun-hee] A record high of 160,000 subscription accounts flooded the 'Maegyo Station Prugio SK View,' a metropolitan area complex where resale is possible after six months. More than half of the total units were supplied through a lottery system that allows even one-homeowners to win, attracting demand for "trade-up" purchases, and speculative demand aiming for short-term price gains through resale further pushed the number of applicants to an all-time high.

According to Korea Real Estate Agency's Subscription Home on the 19th, the first-priority general subscription for Maegyo Station Prugio SK View (Paldal 8 District Redevelopment) in Maegyo-dong, Paldal-gu, Suwon-si, Gyeonggi Province, which was held that day, saw an overwhelming 156,505 applicants for 1,074 units, resulting in an average competition rate of 145.7 to 1. Approximately 160,000 applicants represent the highest number since the introduction of online subscriptions. Just three months after Paldal-gu's 'Hillstate Prugio Suwon,' which received 74,519 applications for 951 units in December last year and set a record, the number of applicants more than doubled.

The most popular unit size was 84㎡ (exclusive area). For the 405 units offered in this size, a total of 72,432 applicants from both the local and other regions applied. The competition rate was 99.5 to 1 in the local area alone. The highest competition rate was recorded for the 99㎡ units. For 92 units supplied, 9,819 local applicants submitted accounts, resulting in a competition rate of 106.7 to 1.

The large number of applicants for this complex is attributed to the high proportion of lottery-based units and the short resale restriction period. Of the 1,074 general sale units, 690 units (64.2%) are selected through a lottery system. Unlike speculative overheated districts such as Seoul, where all units under 85㎡ are supplied through a point-based system and only 50% of units over 85㎡ are supplied by lottery, this complex offers only 40% of units under 85㎡ through the point system, with the remaining 60% decided by lottery. All large units are supplied through lottery. Unlike the point system, which is only for the homeless, the lottery system allows one-homeowners to win, attracting a large number of trade-up demand seeking new move-in units.

The freedom of resale rights compared to Seoul is also cited as a factor for the complex's popularity. Unlike speculative overheated districts where resale of pre-sale rights is illegal until move-in, resale is allowed freely from August 27, six months after the announcement of winners. The sale price for the 84㎡ unit is set at 652 million KRW (standard floor). Considering that the same size unit in nearby Hillstate Prugio Suwon was actually traded for 770.7 million KRW on the 11th of last month, a minimum price gain of over 100 million KRW is possible. A representative from G Real Estate in Paldal-gu said, "The actual transaction price likely does not include the maintenance fees," adding, "Currently, redevelopment move-in rights in this area are traded at about 600 million KRW for 59㎡ and 850 million KRW for 84㎡ including maintenance fees." If prices rise further after resale becomes possible in six months, the price gain could increase significantly.

▲ 'Maegyo Station Prugio SK View' model house closed due to concerns over the spread of COVID-19. The construction company is operating a virtual model house instead. (Photo by Lee Chunhee)

Although both the point system and lottery system prioritize first-priority applicants who have lived in Suwon for over a year, making it difficult for first-priority applicants from other regions to win, public response was enthusiastic. Various real estate communities and group KakaoTalk chat rooms formed a mood of rushing to apply, saying "You never know." Kim (30), an office worker in Gwonseon-gu, said, "When I inquired at a nearby real estate office, they even proposed that if I win, they would arrange the financing and share the profits from resale," adding, "Most of my coworkers also applied."

The announcement of winners for this complex is scheduled for the 27th. From the 2nd to the 10th of next month, for eight days, winners will be able to visit the model house and submit documents. The contract signing period for winners is from the 16th to the 24th of next month. Due to the spread of COVID-19, visits to the model house will be allowed only for winners.