"Lotto Subscription Queue" Seoul Applications... "Higher Scores Expected for Medium to Large Units"

On the 20th, the "Hoban Summit Songpa" promotional center in Wirye New Town, opened at the Hoban Construction building in Seocho-gu, Seoul, is bustling with visitors. Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Yuri Kim] As about 156,000 applicants flocked to the first large-scale apartment complex sale in the metropolitan area this year, 'Maegyo Station Prugio SK View' in Suwon, 'lottery complexes' are lined up in the spring sales market in Seoul as well. Experts predict that due to the characteristics of Seoul, where there are many reconstruction and redevelopment projects, most of the general sale units are small to medium-sized apartments under 85㎡ (exclusive area), so the winning scores for medium to large apartments are expected to soar.

According to Real Estate 114 on the 20th, there are 18 complexes confirmed for sale and waiting in Seoul in the first half of this year, totaling 25,743 households. Among these, the general sale units excluding union members' shares amount to 11,535 households. In particular, medium to large apartments over 85㎡ among the general sale units are estimated to be around 100 households, accounting for less than 1% of the total.

In fact, Dunchon Jugong in Dunchon-dong, Gangdong-gu, a large complex with a total of 12,032 households and 4,768 general sale units, has no medium to large general sale units at all. Medium to large units are expected to appear in Yongdu 6 District in Dongdaemun-gu and Heukseok 3 District in Dongjak-gu, but currently, the plans show only about 9 units and 1 unit respectively, which is minimal. Susaek 13 District in Eunpyeong-gu plans 98 medium to large general sale units, including 66 units of 102㎡ and 32 units of 120㎡, but it is highly likely that these will be significantly reduced after union members' shares are confirmed.

As the scarcity value of medium to large supply in Seoul increases, winning scores are actually forming higher than those for small to medium units. An analysis by Real Estate 114 of last year's average winning scores for Seoul apartments from the Korea Financial Telecommunications & Clearings Institute showed that units over 85㎡ scored 60.9 points, which is 8.4 points higher than the 52.5 points for units 85㎡ or less. Last year, excluding special supply, the general sale of medium to large units over 85㎡ in Seoul was 2,316 households, about one-third of the 8,350 households of units 85㎡ or less. This also reflects the preference of relatively high-scoring applicants in their late 40s and older for medium to large units.

Even among small to medium units under 85㎡, there was a large variation in winning scores by detailed area. Units between 60~85㎡ scored 57.6 points, which was 9.6 points higher than those 59㎡ or less (48.0 points). Although the 60~85㎡ units numbered 5,787 households, about twice the 2,563 households of 59㎡ or less, the winning cutoff score was much higher.

The subscription market this year is expected to be hotter than last year. Due to the December 16, 2020 measures, the price ceiling system will be applied to private land apartments starting in May, which is expected to widen the gap between sale prices and market prices. Last year, the average winning score in Seoul was only 43.6 points in the first quarter, but due to concerns about a supply shortage of new apartments following the implementation of the price ceiling system, the subscription rush intensified in the fourth quarter, pushing the average to 61.5 points.

Experts unanimously advised the need to establish customized strategies based on scores. Kyunghee Yeo, Senior Researcher at Real Estate 114, advised, "The cutoff scores for small to medium units, especially small apartments, are relatively low, so young people with low scores might consider a niche strategy of choosing small apartments."