Countdown to 'July Lotto Sales' in Gwacheon, Gaepo1, and More

[Asia Economy Reporter Yuri Kim] Despite the government's announcement of additional real estate measures, market interest is concentrated on prime pre-sale complexes in Seoul's Gangnam area and Gwacheon, Gyeonggi Province. With an expected expansion of special supply quotas for newlyweds and first-time homebuyers, demand is anticipated to rush to use subscription savings accounts before the general supply quotas decrease.

According to the real estate industry on the 8th, the Daewoo Construction consortium will launch the first private pre-sale apartment in Gwacheon Knowledge Information Town this month, named 'Gwacheon Prugio Bellarte.' This complex, located in S6 Block of Gwacheon Knowledge Information Town in Galhyeon-dong, Gwacheon, consists of 5 buildings ranging from 3 basement floors to 29 above-ground floors, with a total of 504 households. The units are composed of ▲74㎡A (exclusive area) 36 units ▲74㎡B 19 units ▲84㎡A 264 units ▲84㎡B 50 units ▲99㎡A 108 units ▲99㎡B 27 units. Besides Daewoo Construction, Taeyoung Construction and Kumho Industrial are participating in the consortium. The move-in is scheduled for October 2022.

Gwacheon Prugio Bellarte is expected to see fierce subscription competition due to its 'half-price' pre-sale. The pre-sale price was set at an average of 23.71 million KRW per 3.3㎡. When the Gwacheon City Pre-sale Price Review Committee set the price at 22.05 million KRW per 3.3㎡ in July last year, the Daewoo Construction consortium requested a re-review, stating that construction at that price would inevitably result in losses, and the final price was set at 23.71 million KRW. According to Real Estate 114, the current average market price of apartments in Gwacheon is 43.64 million KRW per 3.3㎡, nearly double the pre-sale price. Special supply applications start on the 16th of this month, followed by first-priority applications on the 17th and second-priority on the 20th. Winners will be announced on the 24th.

The payment terms for this complex are 20% deposit, 60% interim payment, and 20% balance, with interim payment loans subject to speculative overheated district regulations. As private housing supplied in a large-scale land development district, 30% of subscriptions are reserved for residents of Gwacheon City with over 2 years of residence (first-priority local area), 20% for residents of Gyeonggi Province with over 2 years of residence (first-priority other areas), and the remaining 50% for residents of Seoul, Incheon, and Gyeonggi Province with less than 2 years of residence (first-priority other areas), in that order. For units under 85㎡ exclusive area, the subscription point system is applied 100%, while for units over 85㎡, 50% are selected by points and 50% by lottery.

Prime complexes rushing to pre-sell before the application of the pre-sale price ceiling system have also begun their official pre-sale schedules. 'The H Firstier I-Park,' a reconstruction of Jugong 1 Complex in Gaepo-dong, Gangnam-gu, Seoul, is scheduled to announce its resident recruitment notice and start pre-sale on the 9th. This complex is one of the large-scale reconstruction projects in Gangnam-gu, planned to be transformed into 144 buildings ranging from 4 basement floors to 35 above-ground floors, with 6,702 households. The general pre-sale quota is 1,235 households. Hyundai Construction and HDC Hyundai Development Company are in charge of construction. Move-in is scheduled for November 2023.

This apartment's pre-sale price exceeds 900 million KRW, making interim payment loans impossible. Therefore, it is expected that many high-point, cash-rich non-homeowners will flock to apply. This apartment is also called a 'lottery' because, compared to nearby newly built apartments' market prices, a price difference of around 800 million KRW is expected. The average pre-sale price per 3.3㎡ is 47.5 million KRW, with an estimated price of 1.5 to 1.6 billion KRW for an 84㎡ unit. Nearby new complexes such as 'Raemian Blestige' saw 84㎡ units traded at 2.43 billion KRW (8th floor) and 2.51 billion KRW (29th floor) last month.

Meanwhile, Dunchon Jugong, which has recently deepened internal conflicts due to negotiations with the Housing and Urban Guarantee Corporation (HUG) over general pre-sale prices, is expected to decide on pre-sale before the pre-sale price ceiling system on the 9th. The association will hold a general meeting that day to propose a change in the management disposition plan to lower the general pre-sale price to the 29 million KRW per 3.3㎡ range. The association had claimed an average pre-sale price of about 35.5 million KRW per 3.3㎡, but HUG has maintained that it cannot provide pre-sale guarantees above 29.7 million KRW. While the association feels compelled to accept this to avoid the pre-sale price ceiling system, some members strongly oppose it and plan to hold a general meeting to dismiss the association chairman on the 22nd of next month.