[Real Estate Investment] Hot Subscription Market from the Beginning of the Year... Next Month, Around 20,000 Households for Sale in the Capital Area

Strategies for Home Ownership Based on Subscription Competition Rates

9,740 Households Supplied Nationwide in January
Gyeonggi and Incheon Apartment Competition Rates Reach All-Time High for January
Demand Concentrated on Small to Mid-Sized Homes in the Capital Area
Careful Financial Planning Needed Due to Residency Obligations

[Image source=Yonhap News]

[Asia Economy Reporter Kim Hyemin] Although housing purchases slowed at the beginning of the year, leading to a decrease in transactions, the enthusiasm in the subscription market remains strong. Despite successive high-intensity government regulations and supply measures, the demand for homeownership among non-homeowners has not diminished.

According to Real Estate 114 and Korea Real Estate Agency's Subscription Home on the 24th, a total of 9,740 apartments were supplied nationwide last month, with an average subscription competition rate of 17.1 to 1. In particular, the average subscription competition rate in the metropolitan area reached 29.7 to 1. This is seven times higher than the 4.4 to 1 rate recorded in provincial areas. The relatively low competition rate for apartments in the provinces appears to be due to the limited supply of units in metropolitan cities, which attract higher demand.

The increase in the January subscription competition rate in the metropolitan area was driven by Gyeonggi Province. The average competition rate was as high as 60 to 1, indicating fierce competition for winning bids. Incheon also showed a competition rate of 16.9 to 1. Both Gyeonggi and Incheon recorded their highest January competition rates since internet subscription applications became mandatory in 2007. There were no subscription complexes in Seoul in January.

There was a difference in demand by apartment size between the metropolitan area and the provinces. In the metropolitan area, demand concentrated on small to medium-sized apartments of 60 to 85㎡ (exclusive area), whereas in the provinces, large apartments over 85㎡ were more popular. The average subscription competition rate for small to medium-sized apartments in the metropolitan area was 48.7 to 1. Conversely, in the provinces, large apartments had a higher competition rate of 8 to 1 compared to smaller units. Real Estate 114 explained, "The popularity of large apartments in the provinces was due to the scarcity of general supply units, which numbered only 513, and the high proportion of lottery-based units, making it easier for one-homeowners to subscribe."

The industry expects the full-scale sales market to open from March. In particular, 63,139 units, the largest supply in the first half of this year, are waiting to be sold in March. Of these, 27,775 units are in the metropolitan area, including △ Gyeonggi 23,502 units △ Incheon 3,000 units △ Seoul 1,273 units.

In Seoul, Godeok Gangil Jeil Punggyeongchae (780 units) will hold subscriptions in early next month. The sale of Raemian One Bailey (2,990 units), originally scheduled for February, has been postponed to April. In Gyeonggi, large-scale redevelopment sales such as Gwangmyeong City Gwangmyeong 2 District Redevelopment (3,344 units) and Buk Suwon Xi Rex Via (2,607 units) are planned.

Real Estate 114 advised, "With the strengthened obligation for actual residence by subscribers, thorough financial planning must be made before applying for subscriptions." Apartments subject to the price ceiling system in the metropolitan area will have a maximum residence obligation of five years. Additionally, if a mortgage loan is taken in regulated areas, the buyer must move in within six months. It is also important to note that even if a winner of a subscription contract gives up the contract due to financial difficulties, they will be subject to restrictions on re-winning.