Five Canceled Transactions of 3 Billion Won Apartments in Gangnam Within a Month... Forfeited Deposits Exceed 1.8 Billion Won

On the 26th of last month, the sales contract for 'Acro River Park' in Banpo-dong, Seocho-gu, Seoul was canceled. It appears that the buyer forfeited a deposit exceeding 400 million won.

[Asia Economy Reporter Cha Wanyong] Contract cancellations for ultra-high-end apartments priced over 3 billion KRW in the Gangnam area of Seoul are occurring one after another. There have been five confirmed cases in just over a month. The market analysis suggests that buyers, anticipating further price drops, have withdrawn from transactions, forfeiting deposits of at least 300 million KRW per unit.

According to the Ministry of Land, Infrastructure and Transport's real transaction price disclosure system on the 7th, there have been a total of five contract cancellations for ultra-high-end apartments priced over 3 billion KRW in the three Gangnam districts (Gangnam, Seocho, Songpa) from August until now. Gangnam accounted for three cases, while Seocho and Songpa had one case each. Considering that ultra-high-end apartment transactions usually have longer transaction periods due to funding arrangements, the number of contract cancellations is expected to increase further.

First, in Gangnam-gu, a contract was canceled for Hanbo Mido Mansion Phase 2, a representative reconstruction complex in Daechi-dong, for a 126.33㎡ unit (10th floor). The sales contract was signed on June 24 for 3.8 billion KRW but was canceled on the 2nd of this month. Considering that typically 10% of the transaction price is strictly set as the deposit for ultra-high-end apartment sales contracts, the buyer appears to have forfeited at least 380 million KRW.

Earlier, on July 31, a contract was canceled for a 200.9㎡ unit (14th floor) at Posco Tower in Dogok-dong. The sales contract was made on June 14 for 3.95 billion KRW. Also, on July 16, a transaction for an 84.99㎡ unit (15th floor) at Dogok Rexle in Dogok-dong, contracted on July 1 for 3.15 billion KRW, was not completed. Due to the contract cancellations, the buyers likely lost 395 million KRW and 315 million KRW respectively.

In Seocho, a contract cancellation occurred at Banpo Acro River Park, known as a symbol of ultra-high-end apartments. The sales contract for an 84.97㎡ unit (12th floor), signed on April 2 for 4.31 billion KRW, was terminated on August 26. The buyer lost a deposit of 431 million KRW.

In Songpa, the leading reconstruction complex Jamsil Jugong 5th Complex had a contract cancellation on July 9. The sales contract for an 82.51㎡ unit (14th floor), signed on June 24 for 3.185 billion KRW, was canceled. The buyer likely forfeited a deposit of 318.5 million KRW.

While it is difficult to ascertain the exact reasons behind these contract withdrawals, the market views them as likely simple buyer withdrawals given the recent sluggish real estate market and listing prices. In fact, in the case of Dogok Rexle, 14 units out of a total of 228 households are currently listed for sale, but no transactions have been completed for several months. The 84.99㎡ unit, which had its contract canceled, is now listed at 3 billion KRW.

A representative from a real estate agency in Dogok-dong said, "The contract cancellations cannot be attributed solely to the buyers' personal circumstances," but added cautiously, "However, the Gangnam area market has been so sluggish recently, and prices are sharply declining..."