"Can't Stop Even a Bear Market"... Popularity of Guaranteed Capital Gains 'Jupjup' Remains Strong

[Image source=Yonhap News]

[Asia Economy Reporter Ryu Tae-min] Amid the ongoing cold spell in the housing market, non-priority subscription in the Seoul metropolitan area continues to attract a large number of applicants. This is likely because buyers can purchase at prices from a few years ago, which are cheaper than the current market price, and expect high capital gains.

According to Korea Real Estate Agency's subscription website on the 29th, the non-priority subscription for 'Dongtan Station Yemiji Cygnus' in Hwaseong City, Gyeonggi Province, held the previous day, saw 1,274 applicants competing for 5 units of 84㎡ exclusive area, recording an average competition rate of 254 to 1. These units are contract cancellation homes, and due to the nature of non-priority subscription, only residents of Hwaseong City who are non-homeowners can apply. Considering that all 5 units are special supply for multi-child families and newlyweds, many prospective applicants gathered.

The popularity is analyzed to be due to the good location and the sale price being cheaper than the market price. This complex is a station-area complex located 300 meters from Dongtan Station. Furthermore, the current recruitment price is based on the April 2018 sale price, with a maximum of 478.8 million KRW for the 84㎡ unit. This size was traded in the early 800 million KRW range last August. The subscription attracted demand because the price is cheaper than the surrounding market price.

Besides this complex, other recent non-priority subscription complexes are also gaining high popularity. From August 31st for two days, the non-priority subscription for contract cancellations at 'Dongtan Station Yurim Norway Forest' in Gyeonggi Province attracted 9,136 applicants for 5 units. This complex, completed in November last year, had a sale price of just over 500 million KRW for the 84㎡ type, promising high capital gains if selected.

In September, 1,470 applicants competed for 2 contract cancellation units at 'Hanam Gam-il Hanyang Sujain' in Gami-dong, Hanam City, Gyeonggi Province, recording a competition rate of 735 to 1. On the 14th, 1,243 applicants applied for a non-priority subscription for 1 unit at 'Unjeong New Town Park Prugio' in Dayul-dong, Paju City, Gyeonggi Province, showing high competition rates. Despite the decline in apartment sale prices in these complexes, the sale prices remain cheaper, attracting buyers expecting capital gains.

Ye Kyung-hee, senior researcher at Real Estate R114, explained, “As housing prices continue to decline due to consecutive interest rate hikes, buyers have become more sensitive to sale prices. With tightened loan regulations, factors such as the availability of interim payment loans are also important reasons why many applicants flock to subscriptions.”