Actual Transaction Price - Sale Price = 930 Million Won "Seoul New Construction Subscription is a Lotto Win"

Shinchon Granjai 84㎡ Value Doubles in Less Than a Year
Survey of 18 New Seoul Apartments Shows Average Increase of 660 Million KRW
Half-Price Apartment Theory Confirmed
Younger Buyers Panic-Buy, Driving Up Jeonse Prices in a Vicious Cycle

Apartments in Gangbuk viewed from Namsan [Image source=Yonhap News]

[Asia Economy Reporter Onyu Lim] It has been analyzed that the actual transaction prices of newly built apartments in Seoul that moved in last year nearly doubled compared to their initial sale prices. The price increase reached as much as 660 million KRW. This confirms the formula ‘winning the subscription lottery = hitting the jackpot.’ Amid the surge in housing prices due to panic buying, the preference for new apartments has become especially pronounced, causing the value of these complexes to soar.

On the 19th, Asia Economy conducted a full survey of 18 newly built apartment complexes in Seoul with over 500 units each, where both general sale move-ins and transactions occurred last year for 84㎡ (exclusive area) units. The results showed that the actual transaction prices rose by an average of 658 million KRW (95.6%) compared to the initial sale prices. This means the value doubled in less than a year after move-in. Both actual transaction prices and sale prices were investigated based on the highest price.

The complex with the largest gap between actual transaction price and sale price was Sinchon Gran Xi in Daehyeong-dong, Mapo-gu, which moved in last February, with a difference of 933 million KRW. This complex, with a total of 1,248 units, had a highest sale price of 847 million KRW for an 84㎡ unit, but in July last year, the same size unit changed hands for 1.78 billion KRW. The rate of increase reached about 110%. Considering that the unit sold was on the 7th floor, where the sale price was relatively low, the actual market gain is estimated to be even higher. A representative from Daehyeong-dong A Real Estate Agency stated, "Currently, even low-floor 84㎡ units are listed at 2 billion KRW."

Similarly, Goduk Arteon in Sangil-dong, Gangdong-gu (4,066 units) also saw a market gain of 873 million KRW. The highest sale price for an 84㎡ unit was 857 million KRW, but in December last year, a high-floor unit was traded at 1.73 billion KRW. Currently, high-floor and move-in ready units are listed at 1.9 billion KRW, indicating that the price increase trend is still ongoing.

Other newly moved-in complexes also recorded market gains exceeding 700 million KRW, including Sin-gil Central Xi in Sin-gil-dong (781 million KRW), Sin-gil Park Xi in Sin-gil-dong (776 million KRW), Raemian DMC Lucentia in Namgajwa-dong (726 million KRW), Boramae SK View in Sin-gil-dong (726 million KRW), and Hillstate Sinchon in Bukahyeon-dong (710 million KRW).

In terms of rate of increase, Sagajeong Central i-Park in Myeonmok-dong, Jungnang-gu, which moved in last July, recorded the highest at 113.4%. The highest sale price for an 84㎡ unit was 609 million KRW, but a sales contract was signed in December last year at 1.3 billion KRW.

This survey did not include Raemian Leaders One in Seocho-dong, Seocho-gu, and Sinbanpo Central Xi in Jamwon-dong, which had no actual transaction prices for 84㎡ units, nor complexes where 84㎡ units were not generally sold, such as Goduk Central Prugio in Goduk-dong, Gangdong-gu, Gaepo Raemian Forest in Gaepo-dong, Gangnam-gu, and Yongsan Central Park Harrington Square in Hangang-ro 3-ga, Yongsan-gu. Since these complexes are mostly located in prime areas with high apartment prices, if they were included in the sample, the gap between actual transaction prices and sale prices would likely be even greater.

The fact that apartments can be purchased at half price during the initial sale has once again confirmed the formula that winning the subscription lottery is like hitting the jackpot. Especially with the implementation of the private land price ceiling system, expectations for market gains have increased, leading to higher subscription competition rates.

As subscription competition rates and winning cut-off scores soar, there are concerns that young people with low scores are rushing into the existing housing market in panic buying, creating a vicious cycle of rising jeonse (long-term deposit lease) prices due to subscription waiting demand. Yang Ji-young, director of Yang Ji-young R&C Research Institute, predicted, "As prospective subscribers flock to meet residency requirements mainly in the 3rd new town pre-subscription areas, the rise in jeonse prices will further expand."