Fueled by investment demand in non-regulated areas and the second house craze, the average initial sales rate in Jeju Island has been recorded at its highest level since 2015.
According to the data on 'Average Initial Sales Rate of Private Apartments by Region' from the Housing and Urban Guarantee Corporation (HUG), investigated by real estate research firm Realtoday on the 7th, the average initial sales rate of private apartments in Jeju Island in the third quarter of this year was 99.5%. This is the highest except for the third quarter (100%) and fourth quarter (100%) of 2015, when HUG first started compiling related statistics.
The average initial sales rate is the ratio of the number of contracted households to the total number of households available for sale at the initial sales stage of a complex. In other words, the higher this ratio, the more active the market is.
Along with the high average initial sales rate, prices are also on the rise. According to the Ministry of Land, Infrastructure and Transport's real transaction price disclosure system, a 115㎡ unit at 'Nohyeong 2nd I-Park' located in Nohyeong-dong, Jeju City, was traded for 1.4 billion KRW in October. Compared to the same size unit traded for 1.02 billion KRW in March, the price rose by about 300 million KRW in less than a year.
There are also complexes that joined the '1 billion KRW club' for the popular 84㎡ units. An 84㎡ unit at 'Daelim e-Pyeonhansesang 2nd' located in Yeondong, Jeju City, was sold for 1 billion KRW in October. The same size unit in this complex was traded for 680 million KRW in March this year, rising by more than 300 million KRW in seven months.
The rise in initial sales rates and prices is interpreted as a balloon effect occurring in Jeju Island, a non-regulated area, as real estate regulations have been implemented mainly in the metropolitan area. The domestic second house craze, triggered by difficulties in overseas travel due to COVID-19, is also believed to have influenced this trend.
Meanwhile, there is interest in whether income-generating real estate sales will continue to boom in Jeju.
Green Land Group is currently conducting the second phase sale (130 units) of the 'Jeju Dream Tower Complex Resort' residences located in Nohyeong-dong, Jeju City. The complex consists of two buildings from basement level 6 to ground level 38, with a total of 1,600 units including hotels and residences, ranging from 65 to 260㎡ in exclusive area. One building (750 units) has been in operation since December last year. The current sale volume is 130 units of the second phase from one building's 850 residence hotel units, divided into two types: Standard Suite and Premier Suite.
As it is a residence hotel, not a house, it is not included in the housing count and resale is free. Additionally, it offers a guaranteed return of 6% of the sale price for 20 years to buyers.
In Yeondong, Jeju City, 'Star Regis Yeondong' is scheduled to be sold. It consists of one building from basement level 4 to ground level 15, with a total of 140 units ranging from 44 to 84㎡ in exclusive area. The first-floor lobby will feature a hotel-style lounge cafe, and differentiated convenience services such as a rooftop waterfront space, guest house, and book cafe will be provided. Especially, a BBQ party area with a view of Jeju's scenery will be prepared on the rooftop garden, offering a unique relaxation space for residents.
In the Hankyung-myeon area of Jeju, 'Jeju International School Ibis127' is scheduled for sale. This townhouse complex, located on approximately 30,000㎡ near Jeju English Education City, consists of 21 buildings with three floors above ground, with a total of 127 households ranging from 98 to 99㎡ in exclusive area.
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