Songpa Signature Lotte Castle, 31,780 Applicants for Single Household Subscription
84㎡ Sale Price in 800 Million KRW Range... High Demand Expecting Market Price Gains
[Asia Economy Reporter Kim Hyemin] Amid the noticeable decline in housing prices in Songpa-gu, Seoul, more than 30,000 applicants have flocked to the non-designated subscription offering an expected price difference of about 400 million KRW, drawing attention.
According to the Korea Real Estate Agency's subscription website on the 28th, the non-designated subscription for 'Songpa Signature Lotte Castle' in Geoyeo-dong, Songpa-gu, held the previous day, attracted 31,780 applicants for one unit of 84㎡ exclusive area. Adding the 6 applicants for one special supply unit of 84㎡ conducted on the 26th, a total of 31,786 people applied over two days. This supply consists of contract-canceled houses, and due to the nature of non-designated subscriptions, only Seoul residents who are household heads without home ownership are eligible to apply.
This contrasts with the recent sharp decline in housing prices in Songpa-gu. According to KB Real Estate, as of October this year, the apartment sale prices in Songpa-gu fell by 0.86% compared to the beginning of the year. It was the second-largest drop after Gangdong-gu among the 11 districts south of the Han River in the Gangnam area. In Jamsil, a representative apartment complex in Songpa-gu, the price of the standard 84㎡ unit has increasingly fallen below 2 billion KRW.
Despite this, the surge in subscription demand seems to be partly due to the sale price being about 400 million KRW lower than the market price. The sale price for general supply units was set at 871 million KRW, similar to the price three years ago. Even after adding additional costs such as balcony expansion fees, the total does not exceed 890.7 million KRW, staying below 900 million KRW.
On the other hand, the right to move into the same size unit in this complex was traded at 1.29 billion KRW in November last year. The current asking price is formed at a minimum of 1.65 billion KRW. This large complex, consisting of 17 buildings from basement level 3 to ground level 33 with 1,945 households, completed move-in in January this year. Compared to the nearby complex, e-Pyeonhansesang Songpa Park Central, the profit margin is significant. The same size unit in that complex was sold for 1.475 billion KRW in August this year.
An official from the sales industry said, "It seems to be a record-breaking success, combining both waiting subscription demand and speculative demand aiming for price gains," adding, "Despite the surrounding housing prices falling, applicants believed they could enjoy price gains."
Recently, the subscription market has shown a stark contrast depending on the sale price. In mid-this month, the non-designated subscriptions for 'Gwacheon Prugio Lavieno' and 'Gwacheon Prugio Bellarte' in Galhyeon-dong, Gwacheon-si, Gyeonggi-do, attracted 8,605 applicants for 8 general supply units, recording an average competition rate of 1,075 to 1. This complex also offered prices at the level of two years ago, expecting at least 600 million KRW in price gains. Conversely, the Indukwon Ja-i SK View in Naeson-dong, Uiwang-si, Gyeonggi-do, which faced criticism for high sale prices, saw about 60% of winners cancel their contracts, and only 6 applicants applied for 508 units in the non-designated subscription held on the 25th, showing rejection from demanders.
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