This Year’s General Supply of Seoul Apartments Hits Lowest Since 2009

Cause of Decrease in Seoul Maintenance Project Volume... Subscription Competition Rate Increasing Every Year

[Asia Economy Reporter Kim Min-young] This year, the supply volume of general apartment sales in Seoul recorded the lowest level since the global financial crisis in 2009.

According to Real House, a specialized sales analysis company, the supply volume of general apartment sales in Seoul up to October this year was limited to 2,440 units across 12 complexes. Compared to the same period last year (9,636 units), it shrank to about one-quarter. The general sales volume refers to apartments supplied purely to the general public, excluding units allocated to reconstruction and redevelopment project association members.

By year, the supply volume of general apartment sales in Seoul decreased to 3,761 units in 2009, right after the financial crisis, then increased beyond 10,000 units in 2015. However, after peaking at around 16,000 units in 2017, the supply volume of Seoul apartments has been declining annually.

The reduction in Seoul apartment supply appears to be due to delays in reconstruction and redevelopment project sales. In fact, as the government announced plans to revise the pricing-related system, more complexes are postponing sales to next year rather than this year. The Dunchon Jugong reconstruction apartment, ‘Dunchon Olympic Park Avenue Foret,’ postponed its sales to next year to apply the revised price ceiling system instead of the 29.9 million KRW per pyeong price suggested by HUG. Large-scale complexes such as 3,069 units in Dongdaemun-gu Imun 1 District, 2,636 units in Songpa-gu Jamsil Jinju Apartment, and 3,080 units in Seocho-gu Bangbae 5 District have also delayed their sales to next year.

As the supply of Seoul apartments decreases, the competition rate for subscription in the Seoul area is soaring. With many applicants flocking to Seoul, the average first-priority subscription competition rate this year reached a record high of 163 to 1. The competition rate has been increasing annually, with 29 to 1 in 2019 and 71 to 1 in 2020.

The winning scores are also forming at high levels. At ‘e-Pyeonhansesang Gangil Urban Bridge,’ recently sold in Gangdong-gu, Seoul, there was a subscription account with 81 points. At ‘Raemian One Bailey’ in Seocho-gu, the only reconstruction sale in the Gangnam area, a perfect score (84 points) subscription account appeared. This score requires a seven-member family to have a 15-year period of no home ownership and more than 15 years of subscription to the housing subscription savings account.