[Asia Economy Reporter Ryu Taemin] The fever of the Seoul subscription market, which had been characterized by ‘blind subscription,’ is rapidly cooling down. Despite lowering the sale prices and conducting more than 10 rounds of non-priority subscriptions (jupjup), unsold inventory issues are recurring. Amid perceptions that housing prices have peaked and concerns over loan regulations and interest rate hikes, buyers’ burdens have increased, leading to a stronger trend of ‘selective subscription’ based on location and sale price.
According to the Korea Real Estate Board’s Subscription Home on the 19th, ‘Hanwha Forena Mia’ in Mia-dong, Gangbuk-gu, Seoul, which conducted a non-priority subscription for 82 units last month, had 74 units remain unsold. Although the average competition rate was 1.5 to 1 at the time, only 8 units were actually contracted. The three size categories with unsold units were all the highly preferred exclusive 80㎡ and 84㎡ types favored by actual buyers.
This complex had offered 328 units for general supply in March, but 139 of those units remained uncontracted. It is interpreted that buyers turned away due to the sale prices being set higher than the surrounding market prices. The sale price for the 84㎡ (exclusive area), known as the ‘national standard size,’ was set between 1.08 billion and 1.15 billion KRW. Additionally, if paid options such as balcony expansion or system air conditioner installation were added, the price approached 1.2 billion KRW. Since the sale price far exceeded 900 million KRW, it also became difficult to obtain bank interim payment loans, which likely added to buyers’ burdens.
Non-priority subscription refers to accepting new subscription applications for remaining units that occur due to non-contracts or disqualifications after the resident recruitment period. Anyone aged 19 or older residing in the relevant area can apply without restrictions such as holding a subscription savings account or being a non-homeowner.
Some Complexes in Gangbuk and Gwanak, Seoul Also Have Unsold Units... ‘Sorting the Wheat from the Chaff’ Begins
Unsold inventory is increasing in other areas of Seoul as well. ‘Sillim Sky Apartment’ in Sillim-dong, Gwanak-gu, Seoul, which was offered in August last year, had 27 out of 43 units unsold. Despite conducting non-priority subscriptions 10 times afterward, 4 units still have not found new owners.
‘Cantavil Suyu Palace’ in Suyu-dong, Gangbuk-gu, which started subscription applications in February, had about 91% of its 216 units unsold, totaling 198 units. After receiving applications for non-priority subscriptions three times, the unsold situation continued, leading to a decision to discount the sale price by 15%. The original sale price for the 59㎡ units was between 861.2 million and 879.1 million KRW, but after the discount, it dropped to between 680 million and 785 million KRW. However, even in the fourth non-priority subscription conducted at the discounted price, 8 out of 10 types reportedly remained uncontracted.
A sales official said, “Due to concerns over loan regulations and interest rate hikes, the price outlook is not good, so the atmosphere of ‘sorting the wheat from the chaff’ has begun. Many in their 20s and 30s who applied for subscriptions without much thought cancel their contracts after winning because they cannot afford the costs.”
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