Suncheon-si Designated as High Pre-sale Management Area Following Adjustment Target Area Designation

Mandatory Pre-Approval of Housing Price by Korea Housing & Urban Guarantee Corporation for Apartment Sale Guarantees

[Asia Economy Honam Reporting Headquarters Reporter Lee Hyung-kwon] Suncheon City, along with nearby Yeosu and Gwangyang, has been designated as a real estate adjustment target area and subsequently designated as a high-priced housing management area.

In high-priced housing management areas, the sale price must be set at the same level as apartments sold within the past year. If there are no apartments sold within the past year, the sale price must be set within 105% of the previous sale price.

Accordingly, apartment construction project operators must obtain a guarantee certificate by undergoing a price review by HUG (Housing and Urban Guarantee Corporation) when submitting the sales guarantee certificate for tenant recruitment announcements.

Meanwhile, since the 18th, the entire Dong (neighborhood) area, Haeryong-myeon, and Seo-myeon in Suncheon City have been designated as real estate adjustment target areas, resulting in various regulatory measures.

The loan-to-value ratio (LTV) is limited to 50% for amounts up to 900 million KRW and 30% for amounts exceeding 900 million KRW, and the debt-to-income ratio (DTI) is set at 50%, among other loan restrictions.

Additionally, real estate-related taxes such as capital gains tax and comprehensive real estate tax have been strengthened, the eligibility requirements for first-priority subscription have been raised, and the resale of pre-sale rights is restricted until the ownership transfer registration.

A Suncheon City official stated, “Through this real estate policy, we expect to prevent speculative forces caused by overheating of the real estate market in advance, establish a housing market order centered on actual demand, and achieve market stabilization.”