As Subscription Results Are Released, 'Chopikkun' Crowd Gathers... Outsiders Flocking to Non-Regulated Areas

No Pre-sale Restrictions or Regulations
Heat Spreads from Gangwon and Chungcheong Regions to Iksan
High-rise Prices Soar

[Asia Economy Reporter Kim Hyemin] The real estate fever in the Seoul metropolitan area is expanding to non-regulated areas, attracting outsiders. While demand was previously concentrated in Gangwon and Chungcheong regions, interest is now spreading to areas that had not received much attention, shifting nationwide. However, experts advise that investors should thoroughly understand the characteristics of each region before investing.

According to industry sources on the 5th, as soon as the winners of the subscription for Hillstate in Iksan, Jeonbuk were announced, inquiries for purchasing the pre-sale rights surged. The so-called ‘chopi,’ the first premium added to the pre-sale rights, reached up to 150 million KRW. A nearby real estate agent said, "Many inquiries come from other regions such as Seoul," adding, "The buyer bears the capital gains tax, and the ‘sonpi’ premium is being asked for up to 50 million KRW." The pre-sale price for an 84㎡ unit in this complex is between 300 million and 337 million KRW.

Non-regulated areas have no restrictions on resale or re-subscription for housing applications. Additionally, mortgage loans (LTV) can be up to 70%, and multi-homeowners can also utilize loans, which is believed to be why investors are flocking. Yeokyunghee, Senior Researcher at Real Estate 114, analyzed, "The fact that the real estate boom has reached these areas means that a lot of liquidity has been released into the market," adding, "The recent hot subscription market in Gunsan, adjacent to Iksan, also seems to have had some influence."

Pre-sale rights prices in other regions have also risen simultaneously. The pre-sale rights for a 124㎡ unit of The Sharp Diocean City Phase 2, which was offered in Gunsan, Jeonbuk in February, rose to 681.5 million KRW in four months. This is over 250 million KRW above the pre-sale price of 432.5 million KRW.

The pre-sale rights price for a 131㎡ unit of Sokcho Diocean Xi in Dongmyeong-dong, Sokcho-si, Gangwon-do, which was offered in May last year, also increased by more than 500 million KRW in one year. Considering the sea view advantage, the pre-sale price was set quite high at 1.1702 billion KRW, but it was traded at 1.69008 billion KRW in May, easily surpassing that. The 101㎡ unit of Tangjeong Jwell Prugio (C2 Block) in Asan, Chungnam, was traded at 1.0543 billion KRW in April, more than double the pre-sale price of 425.7 million KRW.

Experts point out that ‘discerning quality’ is essential for investing in non-capital areas where demand is inconsistent. Senior Researcher Ye said, "In regions where large brand apartments are scarce, there may be people moving within the area, but unlike the capital area where demand always follows, non-capital areas have fluctuating demand, which carries risks." She added, "If the purpose is resale, aggressive investment without sufficient knowledge of the area should be avoided."