[Report] "If You Don't Buy, You're a Fool"... Cash Settlement Unleashed in Jeungsan4 and Susaek14, Becoming 'Prey for Speculative Demand'

Cash Settlement Date for Housing Delayed from February to End of This Month
Strong Buying Demand at Major Candidate Sites like Jeungsan 4 and Susaek 14
Original Residents Say "Government Encourages Speculation"

[Asia Economy Reporter Ryu Tae-min] "If you don't buy now, you're a fool. It's basically the government telling us to buy." (Resident A, Jeungsan-dong, Eunpyeong-gu, Seoul)

On the afternoon of the 21st, the Jeungsan 4 District area in Jeungsan-dong, Eunpyeong-gu, Seoul, was bustling with visitors at real estate agencies. This area is the first candidate site for the Urban Public Housing Complex Development Project. Several residents were seen gathered, focused on filling out documents related to real estate transactions. A representative from Jeungsan-dong A Real Estate Agency, busy answering a flood of calls about sales inquiries, waved off the reporter’s interview request, saying, "Please leave if it's not related to sales; we're very busy."

“Let’s get the last priority supply right” Investment demand floods in

As the cash settlement cutoff date for housing in the Urban Public Housing Complex Project, a key measure of the 2·4 Supply Plan, was effectively postponed from February 5 to the end of this month, buying demand has surged in major candidate areas such as Jeungsan 4 District. This is because if buyers purchase homes and complete the transfer registration within about ten days before the related bills pass the National Assembly, they can receive priority supply rights for apartments.

In fact, seven out of eight real estate agencies near Jeungsan Station visited that day reported ongoing housing sales within the district. A representative from B Real Estate said, "As soon as the announcement was made on the 16th, quick-witted investors started flooding us with inquiries," adding, "We currently have nearly ten transactions underway in our office alone."

As demand surged, share prices also soared. A representative from C Real Estate said, "With rising development expectations, prices have increased significantly," and added, "Since priority supply rights can be obtained regardless of the size, homes of about 10 pyeong (approximately 33 square meters) that used to be priced in the low 100 million KRW range are now trading for 500 to 600 million KRW." After the government selected Jeungsan 4 District as the first candidate site for the Urban Public Housing Complex Development Project in March, it quickly secured the required two-thirds resident consent rate within just one month, showing the fastest progress among candidate sites.

Nearby Susaek 14 District, which also secured over two-thirds resident consent around the same time, showed similar conditions. The head of D Real Estate in that area said, "Since the announcement, dozens of homeowners have called saying they want to sell," and added, "There are so many buyers that currently available properties are sold out."

According to the Ministry of Land, Infrastructure and Transport’s real transaction disclosure system, a total of 21 housing transactions were concluded in Jeungsan 4 District from the 15th to the 23rd. During the same period, 16 transactions took place in Susaek 14 District. Considering sales contracts not yet reported, the number of transactions is expected to increase further.

Original residents say, "The government is effectively encouraging speculation"

On the other hand, most residents expressed dissatisfaction with this measure. This is because the more new homeowners, i.e., union members, there are, the lower the expected profits. Existing multi-homeowners receive only one priority supply right regardless of how many houses they own. However, if multi-homeowners transfer their houses under different names as is happening now, the number of priority supply rights to be distributed after development increases. Since profits from general sales are distributed proportionally to the number of residents, the actual benefits returning to existing residents are decreasing.

Resident B, who has lived in Jeungsan-dong for over eight years, said, "Only residents who owned homes before should rightfully receive priority supply rights," and expressed anger, "Speculators have already bought all the houses, so what’s the point of setting a cash settlement cutoff date afterward?"

Song Seung-hyun, head of Urban and Economy, said, "Although the cutoff date for priority supply rights was postponed to the time of the plenary session approval, the legislative process could be prolonged and contracts could be completed quickly," adding, "It is regrettable that this aspect was overlooked and sufficient prior review was not conducted, leading to the influx of speculative demand."